Motion made,
	That so much of the Lords Message [19th May] as relates to the Liverpool City Council (Prohibition of Smoking in Places of Work) Bill [Lords] be now considered.

Motion made,
	That so much of the Lords Message [19th May] as relates to the London Local Authorities (Prohibition of Smoking in Places of Work) Bill [Lords] be now considered.

Motion made,
	That so much of the Lords Message [19th May] as relates to the London Local Authorities Bill [Lords] be now considered.

Alistair Darling: The Scottish economy is growing well. The Scottish Executive has taken a number of steps to reduce the impact of business rates to make sure that they protect businesses as far as possible. I remind the hon. Gentleman—I am not sure how detailed his studies of the Scottish economy are—that all current business surveys are optimistic that Scotland's economic growth will continue and that Scotland has a higher employment rate than any other European Union country bar Denmark, and higher than in England. That shows that the Scottish economy is strong. Of course, other measures need to be taken to continue that growth, both to support business as well as more general steps, but I assure him that should he care to come to Scotland, he will see a picture in many cases of great optimism, which stands in stark contrast to the position 10 or 15 years ago when his party was in government.

Alistair Darling: The commission of fishery protection vessels is a matter for the Scottish Executive, as the hon. Gentleman knows. If there is any discussion as to what classification they ought to have, that is a matter for the Scottish Executive to pursue with the European Commission.
	In relation to employment generally, I am surprised that the hon. Gentleman did not draw attention to the fact that his constituency has seen a dramatic reduction in unemployment since 1997. Nor did he draw the House's attention to the fact that the Scottish economy has grown strongly since 1997, and as I said a few moments ago, the employment rate in Scotland is higher than in most other parts of Europe. I remind him that were we to pursue his policies of tearing Scotland away from the rest of the United Kingdom, they would undoubtedly cause large-scale unemployment in Scotland.

G8 summit

Alistair Darling: I think that the events of Boxing Day last year demonstrate my hon. Friend's point graphically. Obviously the tsunami was caused by movements of the earth several thousand miles away, but there is no doubt that climate change is having an adverse effect on water levels.
	My hon. Friend is absolutely right: this is a pressing issue. The Government raised it in Kyoto, and played a leading role in the Kyoto discussions of the late 1990s. All nations, especially developed nations but also those that are developing rapidly, need to pay attention to the consequences of economic activity, and start taking steps now to prevent the problems that will occur if we do nothing.

Eleanor Laing: This is most unusual—I agree with the Secretary of State again, and I hope that many people will pay heed to what he has just said. Does he agree that in addition to the aims of the G8—I share his views on that point—this is a great opportunity to show that Gleneagles and the surrounding countryside are one of the most beautiful places in the world? Which of Scotland's many other great benefits will the Secretary of State be promoting to the thousands of extra visitors that the G8 will bring to our country?

Renewable energy

David Cairns: I thank my hon. Friend for his kind words. I am aware of the project that he mentions, and I congratulate OPD on winning that order from the Portuguese. This is a Scottish success story, in that we have developed the technology that is being purchased abroad. Of course, the project would not have reached this stage had it not been for the investment of a significant amount of taxpayers' money. OPD has benefited from £3.2 million of such investment from the Department of Trade and Industry's technology programme, and it is benefiting from the investment of £6 million in the European marine energy centre in Orkney, where such technology is being trialled. In addition, a £50 million fund is to be set aside, which OPD can bid into to develop marine energy further. Taken together, that demonstrates that the Government not only are committed to renewable energy but are making resources available to make that happen in Scotland and elsewhere.

Skills gap

Stewart Hosie: I welcome the hon. Gentleman to his new position on the Front Bench. Can he confirm that filling the skills gap is not merely about training for those with no skills? It is an ongoing process of retraining and upskilling for those who have skills. Can he confirm that the Government should take the lead in that? What endeavours are under way in the Scotland Office to encourage retraining and upskilling for Department staff? Can he advise of any initiatives to encourage non-financial staff in the Scotland Office to undertake financial training?

G8 summit

Gordon Banks: I thank my right hon. Friend for that answer. As he knows, the G8 summit is taking place in my constituency of Ochil and South Perthshire. With the advent of Live Aid and Bob Geldof's encouragement for getting a million people to converge on Scotland during a week in which "T in the Park" and the world-famous Alva games are also going on in my constituency, is my right hon. Friend concerned that it will be a difficult week for our police, and that that might overshadow the main event? What further assurances can he give my constituents about the burden of police costs for the G8 summit?

Oliver Heald: On a point of order of which I have given you notice, Mr. Speaker. You will be aware that Ministers in the Department for Constitutional Affairs—of whom I have given notice of this point of order; I am sorry that they are not here—have recently transferred to the Home Office a number of questions about alternatives to jury trial and changes to the jury system. Yet in its most recent document, the Department talks about a key issue being efficient and effective fraud trials, and goes on to say that there will be alternatives to jury trial. Can it be right for the Department to claim responsibility for an area such as trial by jury and to put out a document stating that it intends to end jury trial, but then, when the difficult questions come, to dodge them by transferring them to another Department? Should not there be consistency, Mr. Speaker? If a Government Department claims an issue, it should be prepared to answer on it.

Mr. Speaker: Well, I do not want to get drawn into that argument.

Dawn Primarolo: I know that the hon. Gentleman follows these matters closely. Perhaps he will allow me to continue making my speech, so that I can illustrate which parts of the Bill he will be ecstatic about on the basis that they will reduce regulation and make changes within the tax system to assist the processes that businesses enable. He will be able to identify a number of clauses that will do that. If he has the time to sit on the Finance Bill Committee, I am sure that we will all benefit further from his incisive analysis of the matters before us.
	Let me now turn to some of the individual components of the Bill. I shall begin with VAT avoidance. I know that hon. Members will agree that, for a tax system to be effective, everyone must pay their fair share of taxes and receive the reliefs to which they are entitled. We are fully committed to combating all forms of tax avoidance, including VAT avoidance. Indeed, we have introduced a compliance strategy specifically to target the VAT gap, which has been discussed in the House before.
	There are concrete measures in the Bill that will help to combat VAT avoidance. They include legislation in clause 1 that will enable Her Majesty's Revenue and Customs to combat avoidance schemes that abuse UK customs warehousing rules. Clause 3 will extend the provisions dealing with "unjust enrichment" so that no business will unfairly benefit from charging too much VAT. The disclosure rules introduced in the 2004 Budget, which were debated in the House, require promoters and users of certain avoidance schemes and arrangements to provide information to the revenue Departments. Much of that information has been translated into this Finance Bill to close down active avoidance schemes. So, following the announcement made in the 2005 Budget, clause 6 and schedule 1 will extend the disclosure rules to encompass two new listed VAT schemes and a new hallmark.
	Secondly, on gift aid, recent events have demonstrated the generosity of the British people in donating in times of need, and the use of gift aid by charities and donors has grown considerably. For example, £586 million of tax was repaid to charities on gift aid donations in 2003–04. That is why we have included clause 11, which will amend existing gift aid legislation in relation to admissions. The hon. Member for Buckingham (John Bercow) might wish to take note of that proposal, which will assist business and make the rules simpler. The measure will clarify the circumstances in which gift aid will apply when free admission is given in return for a donation. Crucially, this amendment will uphold the core principle of gift aid in generating new and additional giving, and it will broaden the types of charities that can benefit.
	Thirdly, on scientific research organisations, the Government are committed to enabling Britain to achieve its full potential. However, as global restructuring continues, advanced industrial nations are moving away from low-skill, low-tech products and processes, and focusing closely on technology, science, research and development.
	Britain will continue to enjoy its competitive edge only if we develop world leadership in the most technologically intensive and science-based industries and services. In last summer's spending review, the Chancellor set out our 10-year plan for science. That includes a new and stretching target to increase UK investment in both private and public sector research and development from 1.9 per cent. of national income to 2.5 per cent. in 10 years' time. So, clauses 13 to 15 present measures to help foster the wider benefits that scientific research organisations can provide to our economy and business. They will update the exemptions for scientific research organisations, enabling them to widen their activities and undertake a broader range of research and development.
	Fourthly—and turning to financial measures—I am sure that the House will be happy to join me in recognising the vital role played by the City and the financial sector across Britain in driving forward our economy. Professionally managed, well communicated and diverse financial services support our economic growth and are key to our continued prosperity. That is why we have been keen to tackle issues from improved financial inclusion to the workings of the investment chain. As part of the package of reforms of the tax system for authorised investment funds, this Finance Bill includes powers to rationalise the legislation that applies to those funds. Clause 16 specifies a reduced rate of corporation tax of 20 per cent. that will apply to open- ended investment companies, ensuring that they are subject to the same treatment as authorised unit trusts. In addition, clauses 17 to 19 introduce powers to change regulations and are designed to facilitate a more flexible approach to investment strategies.

Adam Price: Has the Treasury come up with its own estimate of the tax revenue that will be forgone as a result of these new measures. Standard Life has suggested something in the order of £4 billion. Can we take it from the Paymaster General's remarks that the Government have no plans to introduce any amendments on this matter during the later stages of the Bill?

Edward Balls: Does my right hon. Friend agree that the fact that in Britain we now have a 10 per cent. rate of capital gains tax for long-term investments means that Britain now has one of the most attractive tax regimes for small businesses to invest and grow? Does she recall that when that measure was first introduced in this House, Opposition Members of all parties attacked it on the grounds that it would lead to tax avoidance; and does she agree that had we taken their advice we would have denied British business and small business the real benefits that have flowed from that reform?

Dawn Primarolo: I well remember that during the debates on the capital gains tax reforms introduced by this Government, Opposition Members forecast that it would be a disaster and would not assist in the rebalancing of the economy, particularly in relation to investment rules. They are in danger of confusing the rules on capital gains, and the very fair tax regime that exists in that regard, with the specific proposals on putting together a pension fund that enables investment to produce an income for individuals in retirement. The continual rationalisation and equalisation of those investment choices led to the changes in the pension fund.
	Let me return to the specific measures on avoidance in this Bill. As I said, the Government have always made clear our determination to ensure that the tax system is fair and is seen to be fair. We have taken a series of concrete steps to prevent abuse of the tax system, and we will continue to close tax avoidance schemes as we become aware of them. Indeed, that was also the policy pursued by the previous Government. Any Government who acted fairly on behalf of the vast majority of taxpayers would pursue a policy to prevent a small number of taxpayers from receiving tax payments to which they were not entitled.
	Such avoidance schemes create economic distortion, provide commercial advantage over compliant taxpayers, and redistribute tax revenues in an unfair and arbitrary manner. Therefore, in addition to the VAT measures and extension of the disclosure rules I mentioned earlier, this Finance Bill will introduce legislation to counter various forms of exploitation. That includes clauses 24 to 31 and schedule 3, which will close down schemes where companies seek to gain a UK tax advantage by exploiting differences within and between tax codes; clauses 32 to 34 and schedule 4, which prevent arrangements that enable individuals and trustees completely to avoid tax on capital gains; and clause 39 and schedule 7, which will prevent avoidance by companies and individuals using financial product-based schemes.
	As announced in December 2004, this Finance Bill will also introduce legislation to close arrangements that seek to avoid or reduce income tax. Clause 12 and schedule 2 will tackle that specifically with regard to remuneration using employment-related securities—a matter to which the House, the Government and previous Governments have had to return repeatedly, to prevent this abuse. Clause 40 and schedule 8 will update the transfer pricing rules introduced by the Finance Act 1998. Those prevent parties who have a control relationship over a company from entering into transactions on a non-arm's-length basis to obtain a tax advantage. A further change ensures that the rules cannot be avoided by putting financial arrangements in place up to six months before a control relationship exists. To counter a number of stamp duty land tax avoidance schemes, clause 49 and schedule 10 will close known loopholes: for instance, limiting artificial group relationships which have been set up purely to avoid clawback of group relief. The definition of "undertaking" will also be restricted in relation to acquisition relief to trades other than property trading, so that only genuine businesses can benefit.
	The clause that I have just mentioned has been subject to some amendment, which I want to draw to the House's attention, as compared with the legislation originally presented to the House in the first Finance Bill back in March. We have listened, and amendments have been made to ensure that stamp duty land tax measures work as intended for home reversion plans, loans or deposit schemes and to ensure that group relief clawback cannot be avoided by the use of leases. There are a small number of other amendments to clauses in the Bill, which include ensuring that legislation introduced by clause 39 and schedule 7 does not affect routine arrangements concerning preference shares—another matter on which we received representations. They will ensure that other common corporate structures not set up for the purpose of avoidance are not affected. We have also extended the period of transitional protection to some companies allowed by clauses 24 to 31 and schedule 3, and we have time-limited the regulation-making power to amend a number of life assurance company tax provisions granted by clause 42 and schedule 9.
	In addition to those and other minor technical changes, the Bill includes a new clause and schedule—clause 37 and schedule 6—which were not included in the previous Bill. Those make amendments to the international accounting standards legislation in the most recent Finance Act, again responding to representations: in this case, that legislation would inhibit commercial restructuring.
	To conclude this summary of the Bill, let me mention the further international measures introduced by clauses 51 to 65. Those make changes to legislation that will give certainty regarding the tax treatment of some transactions involving new European companies, particularly when they are formed by merger. They will also enable UK businesses to take advantage of this new type of corporate vehicle, if they so wish.
	The Budget laid down measures that enable our country to respond to and meet the challenges of a changing society facing a competitive global economy. This second Finance Bill will enact legislation that ensures fair taxation by reducing avoidance, simplifying regulation and supporting important actions such as gift aid. I commend the Bill—

Philip Hammond: I draw the House's attention my entry in the Register of Members' Interests.
	I congratulate the Paymaster General on her presentation of the Bill. This is the first time since Labour came to power that a Finance Bill has not been presented by the Chief Secretary. He is presumably in Luxembourg trying to save the rebate, something of rather more significance to the Exchequer than the measures that we are discussing.
	As the Paymaster General acknowledged, the Bill consists largely of anti-avoidance clauses that were excluded from the truncated pre-election Finance Bill on grounds of complexity and the need for more detailed scrutiny. Since then, the Government have made a number of minor changes, which we welcome as far as they go and which vindicate our decision not to allow such complex legislation to go through on the nod. On key issues, however, major concerns remain.
	Let me say at the outset that Conservative Members recognise the need for the Government continually to address tax avoidance and the racier forms of tax planning in order to protect the Exchequer, although it would probably help if the Treasury started with a bit of housekeeping at home and tried to avoid giving away £2 billion of overpaid tax credits. Many of the tax avoidance opportunities themselves arise from the increasing complexity of tax legislation. Since 1997, the volume of tax statute in force has almost doubled, creating a bonanza for lawyers and tax accountants.
	This is a practical issue. Tax planning is a fact of life for international business, as is tax competition between Governments. Governments everywhere face the same challenge: to reduce the loss of revenue from tax avoidance and tax planning, while ensuring that they do not weaken their international competitiveness. The right balance must be maintained between those competing objectives.
	We understand the Chancellor's predicament. He faces a fiscal black hole, with independent commentators—including the Institute for Fiscal Studies, the International Monetary Fund, the Organisation for Economic Co-operation and Development and the Item Club—all predicting that tax receipts will need to rise sharply if the golden rule is to be observed. He is in any case already projecting a hefty additional contribution from United Kingdom corporations. The Budget projections show corporation tax takes soaring from £34 billion this year to £43 billion next year—a 28 per cent. projected increase in the corporation tax burden, on the back of a growth forecast of 3 per cent. for the economy, at a time when our competitors are increasingly lowering their corporation tax rates.
	We have two overarching concerns. The first is practical—we fear that the Treasury's collective judgment may have faltered under the pressure to find additional sources of revenue and the temptation to address all the avoidance schemes disclosed under the Finance Act 2004. Complex legislation is being proposed to produce additional revenues in the short term. Consultation has been limited, and the Treasury's response to some of the concerns raised has been, to say the least, rather high handed. Assurances that wide powers will be used only narrowly in practice are no substitute for tightly drafted legislation. There remains a real possibility of inflicting damage on some of the UK's most dynamic business sectors in the medium term, and thus of damaging the UK economy's international competitiveness in the long term.
	A successful anti-avoidance measure must increase the tax take while neither adversely affecting transactions not primarily designed for tax-avoidance purposes nor imposing on business a burden of compliance disproportionate to the additional revenue generated. Not all the measures in the Bill will pass those tests, and in Committee we will offer suggestions for achieving its anti-avoidance objectives without the collateral damage that the current drafting risks.
	Our second overarching concern is the direction in which the Government are taking the tax code. Certainty and transparency are the hallmarks of a fair, effective and competitive tax system. A taxpayer is entitled to know with certainty—be it an individual or a multinational corporation—what he may or may not do in planning his tax affairs. He is entitled to expect that his treatment be laid down in statute, not determined by administrative fiat; he is entitled to expect that another taxpayer in similar circumstances will receive treatment similar to his; and he is entitled to be protected from retrospective or retroactive legislation.
	There can be no doubt that this Bill carries us further down the path away from that ideal in several key respects: by giving powers that ought to be exercised by Parliament to officials, so that Revenue guidance will determine how much of the complex corporate anti-avoidance legislation works in practice, and by the use of retroaction not just back to the date of a press release—it is bad enough, but perhaps fitting, that a Government who govern by spin have determined to legislate by press release—but back even further, fundamentally altering the future commercial outcome of arrangements entered into perfectly legally, and sometimes, as in the case of the venture capital industry, with the active endorsement of the Treasury. In so doing, the Bill introduces an arbitrariness that undermines the fairness and predictability that are essential elements of an effective tax system.

Philip Hammond: I can tell the hon. Gentleman that I shall not ask my hon. Friends to vote against the Bill this evening. We accept the principle that the Government must constantly maintain their armoury against the evolution of tax avoidance and tax planning practices. However, as I said earlier, it is a question of balancing the desire to protect the Revenue with the need to maintain our international business competitiveness. Our contention is that although the principles on which the Bill is based are sound, the Government have got the balance wrong in the drafting. The arbitrariness of the powers to be given to the Revenue and the wide scope of many of the provisions in the Bill have created a climate of business uncertainty. Ultimately, that damages the UK economy.
	Schedule 7 is a long, detailed and incredibly complex catalogue of measures. Ten minutes with it is worth about half a dozen Mogadon tablets, so I shall not go into the detail now. However, I advise the House that we shall go into great detail when we consider the Bill in Standing Committee.

Quentin Davies: The hon. Gentleman is wrong about institutional investors: sometimes they decide to take a direct stake in a property. By denying them the right to do so, he will both distort the market and ensure that, to get the benefit of the pension investment, people have to pass through intermediaries, who will presumably deduct fees, commission, management charges and so on. Does he really believe that it is a good idea to distort the investment market in that fashion and to tell people that if they want a tax break, they will have give up some of the benefit to an intermediary? We have been through that before and found it foolish, since it diverts resources from the taxpayer to financial intermediaries, rather than encourages the taxpayer to save more, which is what we want.

Christopher Huhne: I know of no institutional investor who directly manages residential property: they may own it directly, but they have an intermediary managing the property for them. However, I shall enter into correspondence with the hon. Gentleman on the subject. My understanding is that relatively little, if any, investment goes into residential property directly, as opposed to via other investment funds, so I doubt that a distortion such as he describes would be created.

Rob Marris: I understood the Paymaster General to say that the assets would be owned by the pension fund, rather than by the individual. Therefore, in the example the hon. Gentleman gives of a person who invests in a property for children at university, to fulfil their statutory obligations the trustees of that SIPP fund would have to set the rent at the market rate. There would be no gain for the family, because the children at university would not be getting a cheap rent, but would have to pay a market rent. Where is the gain?

Quentin Davies: The hon. Member for Newport, East (Jessica Morden) gave an extremely attractive maiden speech that was very competently delivered. We learned a lot about Newport—or I certainly did, as I did not know much about it before. Many Members on both sides of the House will appreciate the hon. Lady's kind words of tribute to her predecessor, Alan Howarth. It was a model of a maiden speech that augurs well for a new parliamentary career, and I know that we would all want to welcome her to that.
	My hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond) made an extremely well informed speech about the Bill that made me feel that I should try once again to get on to the Finance Bill Committee, because it sounds as though we will have some very interesting subjects to discuss. Clearly, he could not give such a thorough account of the Bill's strengths and weaknesses and at the same time say much about macro-economics. However, that does not mean that there is not a lot that needs to be said about macro-economics, not least because the Government—I am afraid that the Paymaster General is very much in the model of her boss in this matter—continue to take a consistently self-righteous, self-congratulatory and complacent tone in everything that they say on the subject.
	That is disgracefully reflected in the way in which the Red Book is drafted. The Red Book used to be regarded as something that was drafted as dispassionately as possible from a party political point of view by Treasury officials, but—I said this last year but I shall say it again as it remains true—it has increasingly become a work of political propaganda in which everything that happened before 1997 was terrible and everything that has happened since is absolutely brilliant. It is extremely difficult to find some of the essential facts that one needs because those facts, which are not flattering to the Government's performance, and any problems are skated over.
	Against that background, it is important to use this debate to redress the balance—albeit slightly, because that is all that one can do in a very short space of time.

Quentin Davies: I think that standards in these matters have slipped and eroded, which is unfortunate. Were we to go back to the time of Sir Stafford Cripps, we would find that he adopted a more severe approach—not a more successful approach to the management of the economy—to the presentation of the facts in the documents produced in the Treasury.
	A lot is right about the economy: of course, it has been doing well, although not so well since 1997, in terms of growth, as between 1992 and 1997—one would not learn that from reading the Red Book, but it is a fact. Nevertheless, the British economy has some favourable aspects currently, but also some worrying features, which also need to be discussed and addressed. I want the Government to be reminded of them and forced from time to time to address them.
	First, the Chancellor is showing increasing signs of losing control of public expenditure. Those are strong words, but let us examine public expenditure as a proportion of GDP. In 1997, when this Government took office, public expenditure stood at 39 per cent. of GDP. It then fell, because, as we all know, the Chancellor continued with Conservative projections for the growth of public spending in the first two years, to 37.3 per cent. of GDP in 1999–2000. That was a favourable fall. It has now risen to 41 per cent. of GDP, and is projected to rise to 42 per cent. next year. That is a rise of five percentage points in five years, which is quite worrying. What will he do for an encore? Will it rise another five per cent. in another five years, which will be a rise of 10 per cent. over 10 years? It cannot continue rising indefinitely; otherwise, we will have a major economic headache. The Government should address that sort of issue, and not try to bury it. Incidentally, I did not get those figures from the Red Book; I had to find them elsewhere, as they are not in it—I wonder why.

Quentin Davies: The Paymaster General will have to be more specific, and say which of the figures relating to the current budget or the total budget was quoted wrongly. She will be able to compare Hansard with the Red Book, and she will find that I quoted the Red Book precisely. What is more, she has not explained why the Government missed their forecast. We should be extremely interested to know the explanation. Some degree of modesty or humility on the Government's part—some degree of explanation when things go wrong, rather than an attempt to brush under the carpet everything that is not entirely favourable—would be very welcome.

Quentin Davies: The hon. Gentleman has just read out a completely irrelevant quotation. I asked why the Government missed so badly the forecast for this year's deficit, and the hon. Gentleman proceeded to read out a passage about the deficit for the financial year 2003–04 having been greater than that for 2004–05. I shall not make the mistake of giving way to him again, because that has not advanced the argument at all. He was clearly engaged in an exercise of obfuscation, perhaps in order to defend his right hon. Friend the Paymaster General.
	There is a third big question-mark over the direction in which the Government's management of the country's finances is going; indeed, it has been discussed quite a lot recently. Is the Chancellor about to face the dilemma of breaching his golden rule? Will he have to put up taxes or cut spending? The jury is still out on this issue, and I shall not go into it in detail as it has been well aired in recent public debate. All independent forecasters are considerably pessimistic about the Government's chances of meeting the golden rule and balancing the current budget through the cycle, given that it is supposed to finish at the end of next year, without recourse to further taxes.
	This is an important issue not so much because of the potentially severe economic impact of breaching the golden rule or of increasing taxes—we would all very much regret such increases—but because the damage to the Government's credibility would be enormous. We would realise not only that the Chancellor had missed a whole series of forecasts, but that at the end of the cycle, he had failed to observe his own rule. He started out with the immensely ambitious plan of more than meeting the golden rule—of having a surplus over the whole cycle of more than £100 billion.

Quentin Davies: I see that the hon. Gentleman is nodding. To move from a £100 billion surplus to the current break-even situation, with the possibility of going below the waterline and missing the golden rule altogether, is a significant turnaround.
	Something more profound needs to be said about the Government's golden rule and sustainable investment rule, which I welcome in theory. They are right in principle and conceptually, but the question is whether they are being applied effectively, or so loosely that they do not represent the rigorous economic discipline that they purport to represent. If the latter is so, that is very dangerous for the long-term performance of the British economy and—once the cat is out of the bag—for the credibility of its management.
	The golden rule says that the current budget must be balanced through the cycle. That involves a number of assumptions in deciding what the cycle is, which I shall not go into, but one's immediate reaction is that under such a rule, if the economy is growing above trend, the Government will be running a surplus, and if it is growing below trend, they will be running a deficit. So reduction in demand during a downturn is compensated by greater Government spending, and vice versa. That is the classic use of fiscal policy for stabilisation, but one need only look at what has happened since 1997 to see that it is not the golden rule on which this Chancellor bases his economic management.
	When the economy was growing above trend in the late 1990s, public spending was growing at slightly less than the trend rate of the growth of the economy, which was 2.5 per cent. Then, when an election was about to be held in 2000, the Government suddenly took off the brakes, having been very fiscally prudent until then, and projected annual rates of expenditure growth of 3.2 to 3.5 per cent.—way above the economy's trend growth rate of 2.5 per cent.
	Last year, the year before and this year growth in the economy was significantly above the trend rate: 3.1 per cent., 3 per cent. and 3 to 3.5 per cent.—that is the projection for the current financial year in the Red Book. Nevertheless, there were substantial deficits. That must be contrary to any normal understanding of the golden rule. However, the Chancellor does not have a normal understanding of the golden rule. His definition of it is different: if we have had surpluses earlier on within the cycle, we can draw on those later and run up whatever deficits we like. As long as, when we get to the end of the cycle—whatever we decide is the end of the cycle—we have not drawn down all those surpluses, we balance the current budget through the cycle.
	That is simply not good enough for several reasons. The first is that we never know when the end of the cycle is, so it is a pretty irresponsible way to manage the economy. We do not know over how many years to come we will still have, in practice, those accumulated surpluses to spend. We may think that the cycle will come back to the trend rate of growth at the end of 2005, but we may be wrong about that. No one knows, so that is not a responsible policy.
	The Government have not properly focused on the other big problem with that approach to the golden rule. If the golden rule is taken to be—I am sorry, Mr. Deputy Speaker, I am not feeling very well this afternoon. I think I may have to interrupt my speech. I am so sorry.

Kerry McCarthy: I am grateful for the opportunity to make my maiden speech today and it is a privilege to follow my hon. Friends the Members for North Ayrshire and Arran (Ms Clark) and for Newport, East (Jessica Morden). I congratulate them on their excellent speeches.
	I begin, as is customary, by paying tribute to Jean Corston, my predecessor. Jean served the people of Bristol, East for 13 years and was a dedicated and tireless constituency MP. As Chair of the Joint Select Committee on Human Rights she monitored the implementation of the Human Rights Act 1998, one of the most important pieces of legislation of this Government. As the first woman to chair the parliamentary Labour party—I know that Jean regarded that as an immense honour—she handled relations between the Government and Labour Back Benchers not only with the discretion required of the role, but with great integrity.
	Bristol, East has a proud tradition of political activity. Ben Tillett, the dockers' leader and co-founder of the National Transport Workers Federation, was born in Easton in my constituency, and Ernest Bevin, the first general secretary of the Transport and General Workers Union, started his political career there. He went on, of course, to become Foreign Secretary in a Labour Government.
	The constituency was previously represented by Tony Benn and Sir Stafford Cripps, both towering figures in the Labour Party in their time. The two men had much in common. They both came from wealthy, privileged backgrounds. They were both the sons of MPs—one the son of a Conservative MP who in later life had the good sense to join the Labour Party and the other the son of a Liberal MP who showed equally good sense in doing the same. Both men embarked on political journeys that at times put them severely at odds with the leadership of their party.
	I cannot claim such a distinguished background, and who knows where my political journey in this House will lead me, but I do share at least two traits with both men, in that they were both vegetarians and both teetotal—the hon. Member for North Antrim (Rev. Ian Paisley) may be happy to hear the latter. Indeed, Churchill said of Cripps, in disgust:
	"He has all of the virtues I dislike and none of the vices I admire."
	My constituency office is above the St. George labour club, a building bought for the local party by Cripps on the strict condition that no alcohol was to be served there. I am afraid that I must report that his legacy is now more honoured in the breach than in the observance. I would, I suspect, make myself extremely unpopular with my constituents should I ever try to enforce his wishes.
	Sir Stafford Cripps was of course Chancellor of the Exchequer from 1947 to 1950, and it is therefore fitting that I make this, my first speech to the House, in the Finance Bill debate. Cripps became Chancellor after Hugh Dalton was forced to resign, having leaked Budget secrets to a journalist on his way to the House. I am sure that no modern-day Chancellor would dream of doing such a thing. Cripps was said to have been responsible for Labour's dramatically reduced majority in the 1950 election, by insisting it be held in February as he thought it morally wrong to hold an election just after a Budget, in case he should be accused of bribing the voters. Times have changed.
	Having mentioned Hugh Dalton, I want to take this opportunity to pay tribute to his biographer, Professor Ben Pimlott, who, until his sad and untimely death last year, was my PhD supervisor. He was a kind and inspirational tutor. Although I suspect that now I have been elected to this place, my thesis will go the way of other great unfinished masterpieces, I am sure that many hon. Members will continue to enjoy Ben's works of political biography for many years to come.
	I am, if not unique, certainly unusual on this side of the House in having spent much of my professional life working in the City, in the world of banking and the financial markets. I worked there throughout most of the 1990s, a time when the Tories' economic credibility plunged faster than the sterling exchange rate on Black Wednesday, and a period during which Labour began to nurture the reputation for sound stewardship of our economy that it boasts to this day.
	The Chancellor's nine Budgets are the bedrock—the foundation—of all that we have achieved in government. The benefits can be seen across my constituency, in the increased prosperity in the suburbs of St. George, Eastville, Brislington and Stockwood, and in the regeneration of the inner-city wards of Easton and Lawrence Hill. I pay tribute to the community activists, the voluntary sector workers and the public sector workers who have done so much to help Labour deliver its programme of social justice and economic renewal in Bristol, East.
	Unfortunately time allows me to cite only one example. I was fortunate enough the other week to visit our new city academy. In the heart of the most deprived area of Bristol, what would have been dubbed a failing school has been turned round because the head teacher, Ray Priest, had the vision and the dedication to lobby for city academy status, even though it meant putting his own job on the line. The school was successful in its bid to become a specialist sports academy and with the support of its sponsors, Bristol City football club, the university of the West of England, Bristol chamber of commerce and, in particular, its chair of governors, John Laycock, it has become the biggest employer in my constituency, employing 600 people.
	The school reflects the diversity of that part of Bristol; more than 60 per cent. of the pupils come from a visible ethnic minority community and 31 languages are spoken there. Some of the pupils came to the UK as asylum seekers and in some cases their right to remain still hangs in the balance, but I have no doubt that each child is capable of making a real contribution to this country if only they are given the opportunity and life chances to do so.
	I was privileged to spend some time talking to a handful of sixth-form students who are benefiting from the Government's £30 a week education maintenance allowance. With continued Government support and with teachers who are dedicated to the task of lifting the aspirations and nurturing the ambitions of children from humble backgrounds, I am sure that the academy will go on to produce a generation of winners, both on the playing field and off.
	It is important that the school does not simply benefit the pupils who are lucky enough to be enrolled there. The capital investment has brought a deprived inner- city area truly first-class sports facilities, a theatre, a professionally equipped kitchen for catering students and computer suites that would certainly be the envy of the new Members who have spent the past few weeks fighting over the one PC in our room on the Upper Committee Corridor. The school wants to open its door to the community and indeed is obliged by its funding agreement to do so, and I shall be speaking to Ministers about what I can do to assist it in achieving that objective.
	I am proud to become an MP at a time when the issues of trade justice, debt cancellation and overseas aid have come to the political forefront as never before. The people of Bristol have shown overwhelming support for the Make Poverty History campaign, and on Saturday I shall be joining them as they form a giant human white band around College Green in the city centre.
	It is particularly poignant that the city of Bristol has taken that cause to its heart. Bristol's wealth was built on the 18th-century slave trade. More than 2,100 ships set sail from Bristol on slaving voyages, carrying about 500,000 Africans to slavery in the Americas. Bristol's wealth was built on trade in Africans and in slave-produced commodities such as sugar, chocolate, coffee, cotton and tobacco. Too few people questioned the moral legitimacy of that trade at the time. It was reported that when William Wilberforce's Bill to abolish the slave trade was defeated in the House in 1791 the bells of St. Mary Redcliffe church in my constituency were rung amid general civic celebrations.
	The city has put its past behind it. Today, Bristol is home to many Africans and African Caribbeans, who along with Asians and other ethnic minorities play an important role in the civic and cultural life of the city.
	Bristol also has a growing reputation as a centre for environmentally and ethically sound trading, and I am proud to say that in March it achieved fair trade city status. It would be fitting if we could celebrate the bicentenary of the abolition of the slave trade in 2007 by genuinely embracing the fair trade ethos, not just in Bristol and not just across Britain but by using our presidencies of the G8 and the European Union to instil such values on an international scale. From the slave trade to fair trade—that would be a legacy of which we could be truly proud.

Stephen Dorrell: I draw the attention of the House to my entry in the Register of Members' Interests.
	I congratulate my hon. Friend the Member for Braintree (Mr. Newmark) on a fine maiden speech. I do not agree with what the hon. Member for Wirral, West (Stephen Hesford) said. I thought that my hon. Friend set out with admirable clarity his motivation as a politician, which, in my view, is exactly what should be contained in a maiden speech. I congratulate my hon. Friend on his expression of his motivation and vision, as well as his description of his constituency, as I congratulate the hon. Members for North Ayrshire and Arran (Ms Clark), for Newport, East (Jessica Morden) and for Bristol, East (Ms McCarthy) on expressing to the House their alternative political vision that motivated them and brought them here as well. We have heard four good maiden speeches and I confidently expect that we will hear one or two more before the debate has concluded.
	It has been said that this is the second half of a Finance Bill of which we have already debated the first half. As others have made it clear that they do not claim any great expertise in the detail of the Bill, I will not put myself ahead of that and claim an expertise that others, wisely, have disavowed. It is not appropriate in a Second Reading debate to try to go through all the detail of the various tax avoidance points that are more properly debated in Committee.
	I want to draw out two principles that are important for consideration at Second Reading and which should inform the development of tax policy in this and future Bills. The first principle is one to which I referred in a brief intervention on my hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond). I hold absolutely no brief for those who market tax avoidance schemes and, like my hon. Friend, I make it crystal clear that I support well-thought-through, clear and well-defined anti-tax avoidance measures. There is no dispute between the two Front Benches—and, indeed, between Conservative Back Benchers and the Treasury Bench—on the need to ensure that the Revenue is protected. When people bring forward artificial avoidance measures, Ministers should be supported when they take steps to protect the Revenue. As a former Financial Secretary to the Treasury, I can say that there is a kind of camaraderie between us and it is important that we have some group therapy to ensure that this important principle is defended. I make no apology for that.
	When we introduce anti-tax avoidance measures, we should observe some important principles. The first is that if we propose measures that are based on additional discretion for the tax authorities—the measures in this Bill concerned with combating tax arbitrage are a clear case in point, where there is an enhancement of the discretion granted to the tax authorities under clauses 24 and 26—we should do so only in clearly defined circumstances, mindful always of the need to protect the principle of taxpayer certainty. That is why I made the, I think, correct linkage that if we are to enhance discretion for the tax authorities, hand in hand with that should go a greater acceptance than has been our tradition in this country of binding tax clearances granted by the Revenue to the taxpayer when the taxpayer seeks the opinion of the Revenue before making certain dispositions in their affairs.
	I am well aware of the resistance within the Revenue to that principle. Revenue and Customs, as we must now call it, says, quite rightly, that it is not in the business of giving advice to taxpayers—and that if a taxpayer wants advice, he should go to his accountants. Free advice from the Revenue is not part of its businesses. That is perfectly true, but if a specific proposal is taken to the Revenue in an area of tax policy where the authority has an acknowledged discretion, it is entirely right that the taxpayer should be able to get a ruling in advance of implementing that proposal on how the Revenue will exercise its discretion. I regard that as part of the deregulation agenda.
	It is worth considering the alternatives. One is that the taxpayer constantly has to weigh a range of different possible outcomes and the only winners will be the tax advisers who go to the nth degree to tease out all the possible options. That cost and waste of time and effort within a business could be eliminated simply by the Revenue telling the taxpayer in advance how the law will be enforced in a given set of circumstances that the taxpayer is planning to create.
	I do not disagree with the principle contained in these clauses on combating tax arbitrage, and I absolutely do not want us to make tax arbitrage easier. However, if we are to introduce greater discretion as a way of combating tax arbitrage, it is reasonable to ask that there be greater certainty available to the taxpayer through the principle of greater availability of binding clearances given by the Revenue.

Michael Gove: Thank you very much, Madam Deputy Speaker, for allowing me to catch your eye and giving me the opportunity to make my maiden speech in the House of Commons. Whatever any of us may have done before coming to this House, speaking in the Chamber for the first time is a nerve-wracking moment, and I am therefore grateful for the courtesies that the House extends to new Members during their maiden speech.
	I feel a particular sense of nervousness coming after the hon. Members for Bristol, East (Ms McCarthy), for Newport, East (Jessica Morden) and for North Ayrshire and Arran (Ms Clark), and my hon. Friends the Members for Shipley (Philip Davies), for Braintree (Mr. Newmark), for Wellingborough (Mr. Bone) and for Beverley and Holderness (Mr. Stuart), who all gave accomplished speeches.
	The hon. Member for Newport, East spoke with great charm about her constituency and with great force about her passion for social justice. The hon. Member for North Ayrshire and Arran follows in the distinguished footsteps of Brian Wilson and a hero of mine, Sir Fitzroy Maclean. She is a worthy follower in that tradition. She spoke without notes but with great fluency and conviction. The hon. Member for Bristol, East also follows in distinguished footsteps, and she lived up to that in a speech of great wit and authority.
	My hon. Friend the Member for Braintree spoke with great force and persuasiveness. He gave a maiden speech in the best traditions of the House and I congratulate him. My hon. Friend the Member for Shipley gave a witty and forthright speech which I greatly admired, and my hon. Friend the Member for Wellingborough gave a personally powerful and principled speech on which I congratulate him. My hon. Friend the Member for Beverley and Holderness also spoke without notes but with tremendous aplomb and authority. I wish them all well in their careers in the House.
	This Bill is of particular concern to my constituency of Surrey Heath, which is an economically vibrant home to both multinational companies and a wealth of small and medium-sized enterprises. There have been a number of distinguished contributions to this debate. The hon. Member for Newcastle upon Tyne, North (Mr. Henderson), as befits a former Foreign Officer Minister, ranged far and wide in his remarks. Other Members, such as the hon. Member for Eastleigh (Chris Huhne), were rather more tightly focused. With your permission, Madam Deputy Speaker, I hope to be a little less than tightly focused and to use this opportunity to look at the broader themes underlying the Finance Bill.
	As the son of a small business man who ran a flourishing fish merchants in Aberdeen, at a time when that city's fishing industry was in ruder health than today, I know personally how regulation and legislation conceived from the best of motives can stifle enterprise and limit opportunity.
	Any opportunities that I have in life I owe to my parents and to the sacrifices that they made. They adopted me when I was just four months old, and I was fortunate therefore to be raised in a secure and loving home. That has left me with a profound sense of the importance of helping families to withstand all the pressures placed on them by modern life, and I hope in my time in this House to do what I can to improve the lives of children born to disadvantage and to support all parents in the difficult but immensely rewarding task of raising families.
	Before turning to the legislation that is before us, I should like to pay tribute to my predecessor as MP for Surrey Heath, Nick Hawkins. Nick served for 13 years in this House, first as Member for Blackpool, South and latterly as MP for Surrey Heath. During his time here, Nick set an example as a diligent and caring constituency MP, as well as a robust and principled scrutineer of legislation. During my time as a parliamentary candidate and in my brief weeks as an MP, I have met many constituents for whom Nick was an indefatigable champion; he set a standard that it would be difficult to match. I also know, not least from his many friends still in this House, how valuable Nick's sharp legal brain was in the scrutiny of legislation. Nick's belief in defending the principles of our common law and standing up for the liberty of the individual do him great credit, and I wish him well in the legal career to which he has now returned.
	Following in Nick's footsteps is a challenge, but it is made far easier by the charm and friendliness of the people of Surrey Heath. It is both an honour and a pleasure to represent the most attractive and vibrant constituency in the county judged by "Country Life" to be England's most beautiful. I know that there may be some dissent among my hon. Friends, but as a flinty Scot, and someone who therefore judges English beauty with an unclouded eye, I can only say that I concur with the judgment of "Country Life". Surrey is indeed God's own county; it combines the best of England's civic traditions with large areas of still unspoilt rural charm.
	Camberley is the largest town in my constituency. I am sure that memories of it will be dear to those hon. and gallant Members who passed through the Royal Military academy or the Staff college, both of which lie in its precincts. Camberley's particular charms are not, however, known only to those who pass through the RMA's gates. Thanks to John Betjeman's most famous poem, "A Subaltern's Love Song", the romance of Camberley is well known:
	"nine-o'clock Camberley, heavy with bells,
	And mushroomy, pine-woody, evergreen smells"
	is how he immortalised that beautiful town. While the scent of Camberley is now tinged with the odour of fumes from the M3, which cuts a swathe through my constituency, there is a still a pine-woody and evergreen quality to the town that is very pleasing to this Scottish exile.
	John Betjeman is not the only great writer to have drawn inspiration from the air of Surrey Heath. John Gay's "The Beggar's Opera" draws on the history of Bagshot heath in my constituency as a haunt of highwaymen and cutpurses. "The Beggar's Opera" is a satire in which comparisons are drawn between the highwaymen of 18th-century Surrey and the politicians of 18th-century England; both, John Gay suggests, were charming rogues who made it their business to deprive honest citizens of hard-earned money, only to squander the plunder on their own vanities. I will leave it to other Members to decide what relevance, if any, John Gay's insights have to discussion of this Finance Bill.
	One area where I believe that public investment continues to be more necessary than ever is in our security, and I want to touch briefly on that matter. The contribution of the military to the life of my constituency has been, and continues to be, immensely valuable. As well as the Royal Military academy, Surrey Heath also benefits from our association with the military in many other ways. Our excellent local hospital, Frimley Park, works closely with the Royal Army Medical Corps to provide a matchless service for the whole community. We also house the headquarters of the Royal Army Logistics Corps, and it was on the heathland of the Chobham ridges that the world-famous Chobham armour was developed, which has helped to give our armed forces the protection that they need on the field of battle.
	I hope that during my time in this House I can play a small part in giving our forces the support that they richly deserve. Britain's contribution to extending the cause of liberty has been distinguished, and it is a source of pride to me. In a proper spirit of bipartisanship, I pay tribute to this Government for their role in defending the cause of freedom in Sierra Leone, Kosovo and Iraq. I hope that it will not be considered wrong of me, however, to pledge that I shall use my position here to ensure that in future those who risk their lives on our behalf are given all the support—political, moral and financial—that they need.
	The tradition of public service that the military exemplifies is richly alive in many other ways in my constituency. We have some of the best state schools in the country, a superb hospital in Frimley Park, as I said, and thriving voluntary organisations as well as active parish councils that serve our more rural communities such as Chobham, West End, Bisley, Bagshot and Windlesham. But the quality of life that the people of Surrey Heath enjoy and have done so much themselves to maintain is, I fear, threatened by insensitive overdevelopment. Plans to build tens of thousands of new homes in our area, imposed by an unelected and unwanted regional authority, combined with planning guidance that demands an increase in housing density, is wholly detrimental to the character of our communities and risks placing great strain on already overstretched public services.
	I firmly believe that all parties in this House in the past 25 years have ensured that power has become too centralised. Decisions are now taken at too distant and remote a level. Intimate questions of planning should be decided by the local people most affected. Planning decisions affect the social capital that individuals and communities have built up over generations. That is why planning law must be seen to be fair, responsive and sensitive. In Surrey Heath, like many other rural areas, we have suffered as a consequence of a small minority—I must stress, a very small minority—of Travellers, who have defied the planning rules by setting up unauthorised encampments on greenfield sites. I hope, while in this House, to be able to change the law in such a way as to ensure the fair application of planning rules. I appreciate the contribution that Britain's travelling community has made to our national life over many generations, but equality before the law is the best guarantee of civilised treatment for all.
	As I said, one of the many attractive features of Surrey Heath is its economic vibrancy. We are lucky to have in the constituency a wealth of local entrepreneurs, including Bob Potter OBE, whose Lakeside hotel in Frimley Green is globally renowned as the home of the world darts championship, thus demonstrating that one does not have to risk going on to Ministry of Defence property in Surrey Heath to see targets being hit with rare skill.
	We are also fortunate in employment terms in the opportunities offered to us by multinational companies that serve my constituency, such as Eli Lilly, BAE, Novartis and S. C. Johnson. All those companies are excellent corporate citizens playing a valued part in the life of the community as well as generating jobs, wealth and taxes for the Exchequer. It is with their contribution in mind that I want to say a few words about the precise measures in the Bill.
	I recognise the need for legislation to reform the tax system and to limit tax avoidance, and there are many provisions in the Bill that may take us in the right direction, but I am concerned that in their zeal to regulate the Government may risk damaging Britain's competitive position. Retrospective and arbitrary changes to the tax code do not contribute to the atmosphere of stability and certainty that encourages investment. As my hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond) pointed out, chapter 4 and clause 39 give cause for concern, as they seem to create the power for arbitrary and retrospective application of the Revenue's powers. I find that a worrying element of the Bill.
	Historians of this House will know that our finest hour came in the 17th century, when we in Parliament insisted on limiting the arbitrary powers of the Executive to impose taxation. In that battle between king and Parliament, I have no hesitation in saying that Parliament was on the right side. I know that the right hon. Member for Kirkcaldy and Cowdenbeath (Mr. Brown) sometimes revels in his reputation as a roundhead; it is a great pity that in this legislation he should be so cavalier with the tax code.
	To my mind, the best way of preventing tax avoidance—I agree with my hon. Friend the Member for Runnymede and Weybridge—is through tax simplification. At a time when economies in eastern Europe are making themselves more attractive to international investment by radically simplifying their tax codes, we should not go down the road of further complicating our own tax system.
	I believe that my constituency has equipped itself well for the challenges of the 21st century by staying true to eternal British virtues—keeping what is cherishable and distinctive, celebrating excellence, having a pride in tradition, but always looking outwards. I hope that we can adopt a similar approach as a nation. Our economic strength has been built on sound traditions and an awareness of the importance of low and simple taxation, light and flexible regulation and wise and prudent investment. When we stray from those traditions, we undermine our future prosperity.
	I want to thank you, Madam Deputy Speaker, for your indulgence in calling me, and in particular, I want to thank very much the people of Surrey Heath for giving me the opportunity to serve them in this Chamber.

Susan Kramer: May I congratulate the hon. Member for Surrey Heath (Michael Gove) on his maiden speech. To have so fluently managed to combine poetry, darts and the Finance Bill is a rare feat. We are not really surprised by his abilities, but we were very much impressed. May I also congratulate all the other maiden speakers today. I must say, however, that the new hon. Member for Beverley and Holderness (Mr. Stuart) intimidated me greatly by suggesting that the Prime Minister might try to emulate Henry V. May I suggest that that is not an example that we wish to put forward to this or any other Prime Minister.
	I hesitated to speak in this debate today, on the grounds that just about everything had been said, if not yet by everybody, but there are two issues on which I want to touch briefly.
	First, I want to return to the issue of the new capacity under the Bill, presuming that it becomes law, to hold in self-invested personal pensions residential real estate—with various safeguards, I understand. The issue for me is not so much tax avoidance, although that, and the possible impact on tax revenue, worries me, but the potential for pension mis-selling. When we consider pension mis-selling, we tend to focus very much on single instruments and on whether the risk associated with a particular instrument has been declared to people. We are all aware, however, that risk refers to the whole portfolio of assets that people hold.
	One only needs to look in today's newspapers, and yesterday's newspapers, to see that many of those who will try to sell those new pension products are gearing up to take advantage of the preference of many people in the UK for holding real estate, especially residential real estate, and to buy into property as the safest and most secure type of investment. Many of those people will already be exposed to the real estate market through their mortgages, and their families in turn will be exposed through their mortgages, and they will now be encouraged strongly, because of such opportunities, to expose themselves through their pension funds to the mortgage and housing market, without necessarily being given the appropriate kinds of advice. Can we have some assurance from the Government that real care will be exercised to make sure that we do not enter into another round of significant pension mis-selling as a result of those expanded opportunities?
	Secondly, on an entirely separate and broader issue, I was very disappointed that neither the first part of the Finance Bill prior to the election nor the second one after the election addressed one of the key financing issues in this country today—funding for major infrastructure projects. There has been a lack of success in terms of delivering major infrastructure projects—I speak with a London hat on as well as with my constituency hat on. It seems to me that the Government have missed the opportunity in the Bill to bring forward mechanisms that would allow public authorities to finance new and vital forms of infrastructure through taxes on the windfall increases in land values and rental that occur near new public works.
	Everybody in the House will be aware of the history of developers obtaining about £13 billion as a consequence of public investment in the Jubilee line—the initial investment was about £3.5 billion. That was a huge gain to the private sector, to which it contributed relatively only a few pennies—£180 million would be the exact figure. Raising finance for Crossrail, a much-needed project in London, is now proving exceedingly difficult—an experience repeated for projects all over the country. I am sad that the Bill has failed to seize the opportunity to take advantage of the potential gains that I have identified.
	I hope that those issues can be addressed when the Minister winds up the debate or on another occasion.

Theresa Villiers: I address the House with a degree of trepidation on such a difficult and technical matter as a Finance Bill. I might not be giving my maiden speech today, but I assure Members that maiden speech plus one is still an intimidating task to face.
	Yesterday, I had the privilege of extolling the beauties of my constituency to the House, and of regaling the House with some obscure facts about it. I therefore decided to start in a similar vein on this matter—with the obscure. If Members will forgive my pronunciation of Latin, I will talk first about what is known as the Societas Europaea—the European company statute. It is covered by clauses 51 to 65 of the Bill, and is a scheme that has been in operation since October 2004 to allow people to set up pan-European companies. It is useful for the House to examine how the scheme has been operating, as it is an interesting case study in how things get done in the European Union and the problems that have occurred with single market legislation.
	The scheme starts out as an inoffensive and even fairly good idea to allow companies to cut costs by having a single incorporation that will operate throughout Europe, rather than having to have different companies incorporated in different member states. A positive aspect of the scheme is that it is voluntary—it is an option for business to take up if it wants to do so; it is not compulsory. The less good news is that it took nearly 40 years to agree in the European Union—even longer than the notoriously long-drawn-out chocolate directive—which shows that decision-making processes there still leave a lot to be desired.
	Another aspect of the scheme covered by the Bill is that the end result is cumbersome and bureaucratic, as one might expect of a scheme that took 30 years to agree. As a result, few companies have taken the opportunity to opt into the scheme. The EU legislative scheme has failed to produce an attractive framework for business to use, and companies are currently voting with their feet—the Economic Secretary will correct me if I am wrong—and opting for national corporate registration rather than this new EU-wide scheme, reinforcing the practical advantages of national decision making and national jurisdiction.
	There is another lesson to be learned from this long-running saga, however, which has direct relevance to the Bill that we are considering today. If we examine the debates on the European company statute in the European Parliament, we see that almost every speaker called urgently for a European system of corporate taxation to match the European company statute that they had just created. In that, as in many other areas, measures introduced on the basis of trade and the single market are being used as vehicles to drive forward tax harmonisation and an expansion of the EU's role in tax. I fundamentally oppose that, as does everyone on the Conservative Benches. In pushing forward EU political integration and tax harmonisation by a series of such small, technical steps, that integration is disguised from public scrutiny. It has been described as a salami-slice approach—by a series of different technical measures, the EU seeks to enlarge its role in all sorts of areas of our national life, including tax, without drawing the attention of the people to what is happening.
	In the tax area, the real threat is posed by the European Court of Justice. There is every danger, as we have heard already in this debate, that the proposals in the Bill on the taxation system to be applied to the European company statute might not be worth the paper on which they are written. The European Court of Justice might simply choose to overturn them, as it has done in a number of instances in relation to UK tax measures. I remind the House that that means instant, immediate tax harmonisation: no debate, no elections, no scrutiny and no referendums. It means instant EU involvement, and expanding involvement, in our taxation.
	Her Majesty's Treasury has repeatedly, especially in recent years, expressed its opposition to further EU involvement in tax harmonisation. I should like to hear what the Minister and the Government propose to do to curb the power of the European Court of Justice. Will they take action if the Court continues to strike down British tax laws such as the one that the Government are presenting to the House today? What will they do if the UK Government lose the Marks and Spencer case, and the many others that await judgment in Luxembourg?
	Labour loves to say that it is extreme to criticise the remit of the European Court of Justice and extreme to call for curbs on it, but I cannot believe that Her Majesty's Treasury is not concerned about the inroads into its revenue that are increasingly being made by the many cases finding their way through the Court in Luxembourg. As we heard from my hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond), the problem involves not just the European company provisions in the Bill but a number of others.
	Let me turn from one rather low-profile topic to another. Clause 37 and schedule 6 are fairly obscure and technical, but they are part of a bigger and more important project: the implementation of international accounting standards in this country. I welcome the fact that, in this draft, the Government have responded to many of the concerns of the securitisation industry—which, while not enjoying a high profile, plays an important part in our financial markets, and consequently in the economic health of the nation.
	I supported the international accounting standards project, which represents a move towards a single global accounting standard. I consider it desirable because it will hopefully cut costs for business, and enhance transparency for investors by allowing them readily to compare the accounts of different companies and different investments in different countries. The real value of the scheme, however, can be realised only if it becomes a global and internationally accepted standard. It has been adopted in theory in the European Union, although the implementation process is slow. What we really need to do is ensure that there is a transatlantic consensus on international accounting standards.
	At one stage it seemed that it would be impossible to reach such an agreement. The United States was perfectly happy with its accounting system, and was not interested in anyone else's. Recent corporate scandals have caused it to look at its systems afresh, and to adopt a positive approach to international accounting standards. That gave rise to a political opportunity, but following such a promising development it seems that the wheels are in danger of falling off the IAS project. Given the controversy over IAS 39, the standard on derivatives, there is every danger that the EU will dilute the international standard that it has only just adopted. In departing from that gold international standard, it risks creating a European gap and an IAS lite, and losing its political opportunity to build the transatlantic convergence that could save businesses many hundreds of thousands of pounds: they would no longer have to compile separate accounts for their branches in north America and in Europe. I urge the Government to press that important issue in both Brussels and Washington.
	Let me now deal with the more high-profile issues relating to the way in which our economy is working. Many speakers have touched on them already today. Clauses 16 to 23 deal with taxation of investment funds. I share many of the anxieties expressed by my hon. Friend the Member for Runnymede and Weybridge about the extent of delegation to secondary legislation. Over the past 30 years, there has been a massive increase in the amount of such legislation. We need only visit a law library to see that the number of slim volumes containing secondary legislation, such as statutory instruments, covering most of the century has expanded massively over the past 20 or 30 years. I believe that that is bad for our democracy. In taxation matters above all, we should maximise democratic scrutiny and maximise transparency. I believe that delegation to secondary legislation is particularly dangerous when it involves measures to remove money from people's pockets.
	I cannot contribute to a debate on finance, especially one that covers taxation of investment even in this technical way, without referring to what I consider to be the most important financial and economic issue facing the country: the crisis in savings, investments and pensions. I am profoundly concerned about the collapse in saving and the crisis in our pensions system. Like my hon. Friend the Member for Beverley and Holderness (Mr. Stuart), I believe that a number of the Government's economic decisions have been correct and could not be opposed by anyone. The Government have displayed a degree of common sense, most notably in giving independence to the Bank of England. However much we might debate aspects of the Government's record, however, one thing seems clear to me. When Labour was elected, Britain had some of the strongest pensions in Europe; now we have some of the weakest. In this country we are saving about a third less than we were when Labour was elected in 1997. Estimates of the shortfall vary, but it seems likely that Britain should be saving about £27 billion a year more to be sure of a safe and secure old age for its people.
	I am afraid that this Government must take their share of responsibility: responsibility for the extra £5 billion annual tax that they have imposed on pension savings, for the abolition of personal equity plans and tax-exempt special savings accounts, for their refusal to abolish the annuity rules, and above all for the massive increase in means-testing—a subject dealt with in a number of today's maiden speeches.
	For every £1 of income from savings, a pensioner can lose up to 90p in means-tested benefits. Given such an excessively high level of marginal taxation on savings income, is it any wonder that savings have collapsed in this country? I return to the subject of our debate, the taxation of investment and arrangements for taxation. I strongly believe that the only way in which to tackle the current crisis effectively is to encourage people to save by giving them a tax incentive: not more obfuscation, not more complexity, but real, substantial tax rewards for those who are responsible, who do the right thing, who save and provide for their old age.
	As I have said, in some respects the Government have made the right decisions for the economy. I have even been known to make common cause with the Treasury in my former role as a Member of the European Parliament. When it comes to savings and pensions, however, I genuinely believe that the Government are failing, and failing badly. Pensioner hardship is a serious problem today, but it is set to become infinitely worse unless we take action now. The Government are building poverty into the DNA of our economy, and creating a pensioner underclass for the future. Whatever the content of this Bill, I urge them to take serious action in their next Finance Bill to remedy what I see as the gravest and most serious economic threat facing us today.

Adam Afriyie: I am grateful for the opportunity to speak in such an important debate. Despite the haste with which I think the Bill was drawn up, dissected and delivered to the House, it will affect many people in their working lives and many hard-working people in their later lives, as was pointed out by my hon. Friend the Member for Chipping Barnet (Mrs. Villiers). It will determine the competitiveness of British business both here and abroad. It will have an impact not just on the good will of charitable people, but on the good work that charities do. I shall say more about that shortly.
	I thank the Paymaster General for her clear explanation of the Bill. I also thank my hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond) for raising the issue of charitable donations and gift aid. That is the issue on which I want to concentrate.
	The Finance Bill is perhaps one of the most important Bills in the Queen's Speech. It is disappointing that there is so little time to debate such an important measure in this House. It is complex, as many previous speakers today have observed, and although it has been truncated it still runs to some 160 pages. I do not believe that four hours is enough time to examine all those pages. I am confident that when it is considered in Committee, Members in all parts of the House will give the detail very serious consideration, irrespective of party politics. Indeed, it is in some of the Bill's detail that the devil lies.
	I have chosen to contribute today because this Bill needs further fine-tuning and refinement. Although it contains some sensible measures on closing tax-avoidance loopholes, they are complex and I am concerned that they receive proper scrutiny. We must be sure that the Government do not drive through tax-avoidance measures that further erode British businesses' competitiveness, act as a disincentive for overseas firms to invest here, or create burdens for all businesses that undermine productivity and negate the benefits that will hopefully be gained from such tax-avoidance measures.
	Lest we forget, British businesses are the engine of our economy. They generate all the jobs, incomes and taxes that make for a good society. British businesses, in a way, are the golden goose of our economy.

Tobias Ellwood: I thank my hon. Friend for giving way. Does he agree that the over-regulation imposed by this Government is stifling British businesses, which are calling for simpler and less regulation, rather than for more and more complex regulation?

Adam Afriyie: I thank my hon. Friend for that intervention and I agree wholeheartedly. My background is in business, and it is clear that the Government, via the European Union, have allowed in swathes of detailed regulations and guidance notes; indeed, there are some 100 pages on working time directives. The weight of that paperwork, regulation and red tape knocks out a whole layer of productivity in British businesses.
	I turn to the charities, charitable giving and voluntary work that underpin our society. Giving is an expression of our humanity: it is an expression of the care that we have for others who may be less fortunate than ourselves. It is also an expression, for charities that focus on these areas, of our concern to preserve and promote our natural environment and heritage. Hundreds of charities are based in or operate in my Windsor constituency. The Windsor, Ascot and Maidenhead volunteers' organisation encourages voluntary work throughout the constituency. The friends of the King Edward VII hospital provide voluntary help to support our local hospitals. The Thames Valley hospice and the Paul Bevan hospice—now combined—would cease to function without charitable giving and the work of hundreds of selfless volunteers and helpers. And of course, in terms of gift aid we should consider Windsor castle, to which clause 11 is particularly relevant.
	Thousands of people work voluntarily for these charities and good causes. They give of their time freely and willingly to help others, to preserve our national heritage and to protect and promote our environment and historic buildings. Of course, thousands of people give to charities as a way of expressing their good nature and good will to others. So charities, voluntary organisations and trusts are the fabric of a healthy society. On this basis, I want to draw the House's attention to clause 11 of the current Finance Bill and, by way of background, to section 25 of the Finance Act 1990, which provided tax relief or gift aid for qualifying gifts from individuals making donations to a charity.
	Broadly speaking, the 1990 Act defined a qualifying gift as a monetary gift that was non-refundable and was not used to buy an asset. Section 25(2)(e) made it clear that the person making a donation could not receive a benefit outside of prescribed limits. An individual donating up to £100 to a charity could receive a benefit of no more than 25 per cent. For a donation of up to £1,000, the benefit had to be no more than £25, and for donations in excess of £1,000, the maximum benefit to the individual concerned had to be no more than £250. A special exemption for certain charities was laid down in subsection (5)(e), enabling them to bestow a right of admission to view certain charitable properties. Charities with that exemption are listed in subsection (5)(f). They consist of those whose main purpose is to preserve heritage property or to conserve wildlife for public benefit.
	The problem is that this exemption remains in place, despite the changes made to the gift aid scheme in the Finance Act 2000. This is perhaps an example of insufficiently far-reaching Commons scrutiny of an incoming Act. The result is that a payment for admission is now eligible for gift aid. To put it simply, certain charities can offer free admission to certain properties equal to the entrance fee, and then claim gift aid on that contribution. That was not the intention of the Act, and although it is legal it is certainly unfair that certain heritage and wildlife charities benefit in this way.
	Clause 11 of the current Bill aims to stop this inadvertent tax benefit of gift aid, if that gift allows the giver entry to an establishment of a certain type. My concern is that removing the benefit without proper scrutiny and consideration might cause some valuable charities to struggle, perhaps to falter, and even to fail in certain cases. Insufficient consideration has been given to the immediate effect of closing this gift aid loophole. Many charities may depend on the gift aid generated by allowing free admission, and they may experience a sudden drop in income. Just as the gift aid loophole was an unintended consequence of past Finance Acts, so this sudden failure of charities could be an unintended consequence of the current Finance Bill.
	The charities concerned are doing their law-abiding business in undertaking good work in society. I am sure that it is not intended that this good work and these charities fail, so I ask the House that consideration be given in Committee to transitional arrangements, or to delaying introducing the proposed change to the gift aid scheme, so that the charities affected can have time to re-work their finances and to continue their good work. Such work is enjoyed not only by Members of this House, but by people throughout the country. I would hate them to be deprived of the pleasures of heritage, or of the charities that deal with our natural environment.

Stephen Hammond: You called me to make my maiden speech two and a half weeks ago, Madam Deputy Speaker, and I am extremely glad that you did. Compared with the eight or nine that I have heard today, it would have paled into insignificance.
	Earlier today, the hon. Member for Newcastle upon Tyne, North (Mr. Henderson) gave us his views on the principles that backed up the first Finance Bill and this one. I recognise one or two trends in this Bill that form part of the Government's taxation policy theme. The tax burden is falling increasingly on those who do not have votes, by whom I mean this country's business community. Most of the rules effected in this Bill will impact on the business climate. Moreover, an environment is being created in which decisions are being made for taxation reasons, rather than for those relating to economic and business decisions.
	It is also clear from the first Finance Bill and this one that the tax burden is increasingly falling in such a way that other people can be blamed for tax increases. A good example, which several Members have already mentioned, is the council tax. As a former local councillor, I know that there is lower central Government funding, greater regulation and pressure for increased planning. We have also seen council tax rises. The Bill continues those themes of taxation. The other discernible trend that is coming through is complexity. The hon. Member for Wirral, West (Stephen Hesford) said that he thought that there were simple principles behind the legislation. There are over 250 pages of guidance on the Bill. It does not seem that it can be described as simple.
	The increasing complexity of the whole tax system means that there are vast areas that no one can really understand. Small businesses and sole traders are spending increasing amounts of hard-earned income to get professional advisers to unravel tax legislation. Anything that is done by business now seems to require costly and detailed legal advice and that is starting to distort the economic basis in favour of larger firms. My hon. Friends the Members for Chipping Barnet (Mrs. Villiers) and for Surrey Heath (Michael Gove) mentioned the need to simplify the taxation process. That is something that we should all support.
	The other general trend in the Bill is that quite a lot of the provisions are presented as anti-avoidance measures. Earlier, my hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond) mentioned what the shadow Chancellor said about part 1. We agree with the Government about the need to tackle avoidance, but clauses 24 and 31 do not necessarily do so. They are widely drafted clauses that potentially have significant consequences for our international competitiveness and inward investment, which is the key to future economic success and which could be damaged. A number of perfectly innocent transactions may be caught by the provisions. I am an economist by training and a financier by profession. I expect that I will struggle with the complexity of those clauses, should I have the fortune to be on the Committee.
	Earlier, the hon. Member for Newcastle upon Tyne, North gave his wide-ranging views on the Bill and some economic history. He proved that economic history can be made to make any point one likes. As the Chancellor recognised in his Budget speech this year, we have had 50 quarters of growth—it is 51 now—so it is highly likely that the macro-economic climate did not change on 1 May 1997. Those people who have had the fortune to read the exposition by the former chief economist of the Institute of Directors will know that the inflation-targeting process, the interest rate decision-making process and the process to bring clarity and transparency started well before 1997.
	An interesting fact to reflect on is that although much is made of the success and strength of economic growth, a number of City reports recently have suggested that the huge increases in taxation since 1997 have raised Government expenditure, which has boosted the underlying growth rates by about 1 per cent. over eight years. Were taxation to be raised to fill the hole that my hon. Friend the Member for Runnymede and Weybridge mentioned, we would expect to see a drop in the underlying growth rate of the economy.
	My hon. Friend the Member for Windsor (Adam Afriyie) talked about gift aid. Like Windsor, Wimbledon has many small charities, some small museums and charitable premises containing exhibitions. I think particularly of the Wimbledon Society museum and the Wandle industrial museum. Many of those organisations have used the current rules that allow gifts to be equal to admission fees and to be taken as gift aid—the charity offers free admission and reclaims the gift aid tax relief. That will now be altered. That is probably correct in that that was not the original intention of the gift aid legislation, although a number would argue that the rules should be relaxed so that small museums and small premises showing these artefacts can survive.
	Having read the legislation, it seems that there will still be allowable donations for the right of entry to qualify for gift aid if the donation is generally available, if the donor takes in one or more members of his family, if the right of admission is for over one year and if the gift is the fee plus 10 per cent. I am sure that there will be support for widening the measure to include charities that display plants, works of art and other artefacts. When the Bill is considered in Committee, I hope that the Government will consider making amendments to that clause. The legislation refers only to viewing those artefacts. In the 21st century, a number of museums, including small museums, have interactive and hands-on displays for young children. The way the clause is drafted would exclude them.
	I wonder why the provision is limited to the donor plus one or more members of his family. Like a number of hon. Members, I have children. We sometimes take groups of children that are not members of my family to local museums. Perhaps the Government will consider widening the provision to include such groups. I accept that there should be a limit, but I hope that they will consider that matter. I am not entirely clear why the right of entry should be for the whole year. Three months would cover that adequately. I hope that the Government will look at that in Committee.
	As I said, I spent the whole of my professional life in the financial world. Obviously, I approve of the City, which is a major source of investment wealth and funding. Therefore, I am particularly interested in some of the clauses in chapter 3. Much of that will be examined in detail in Committee, but, like my hon. Friend the Member for Chipping Barnet, I have noted the huge increase in the number of statutory instruments that are coming through. Many of the changes in the Bill will be dealt with by statutory instrument, not primary legislation.
	There are concerns that the changes in clause 16 will have little revenue impact. There is due to be a reform of fund taxation within the next two or three years. It seems that these are interim changes. However, there are some huge cost implications for the industry. It would be easy not to bring clause 16 forward.
	Clauses 24 to 31 fall into the category that I mentioned earlier: presentationally, they are anti-avoidance measures. There are a number of ways in which they could be enacted but, having read the Bill, and I am sure I will be corrected if I am wrong, it seems that the rules will apply in this way. If an American or other multinational company decides to build a factory in this country and create jobs, that could be financed by a bank and it would attract tax relief for the interest paid to the bank. However, if the Americans, or whoever, choose to finance the investment through lending from their own US parent company and in that way receive a subsidy from the American taxpayer for the investment in the UK, UK tax relief is unchanged. The only difference is that the American taxpayer is helping to finance the investment in Britain.
	I believe that the new legislation and the guidance suggest that, in that case, UK tax relief will be denied. That seems to be simply because there is a subsidy from the American taxpayer. Without that subsidy, the loan might not be granted and the factory might not be built. Should we be concerned that the American taxpayer is providing that subsidy? I do not think so. I am not sure of the economic rationale behind that. The stance being taken on tax arbitrage in all circumstances must be bad. The effect of the new rules is to create uncertainty for UK multinationals, as some hon. Members have mentioned.
	The legislation will affect the UK as the international policeman on the funding of debt through hybrid entities. Other tax authorities may gain revenue at the expense of UK investors. Those who choose those entities may then choose a different location to take their tax deduction. We may therefore see an expense to the UK investor and some gain in revenues for tax authorities abroad. That further hinders the prospects of inward investment.
	The anti-avoidance clauses give huge discretionary powers to the Inland Revenue to give notices to taxpayers. They seem to be arbitrary, which is understandable, but they create uncertainty. As my right hon. Friend the Member for Charnwood (Mr. Dorrell) said, he wants to see certainty and an appeal process. He also wants a clearance process initially. It seems to me that that is only fair. Notices are, by their very nature, individual and one cannot necessarily guarantee the same treatment to two identical taxpayers. I hope that we shall examine that further in Committee. When we debate the Bill in Committee, I hope that Treasury Ministers will be able to provide some clear interpretations as to the manner in which the clauses will be enacted, along with some practical examples of how they expect them to work.

Lee Scott: I congratulate all hon. Members on their maiden speeches.
	I have been approached by a charity in my constituency of Ilford, North, which has brought to my attention problems surrounding old manuscripts and books. Would it be possible to clarify in the wind-up debate whether new subsection 5G in clause 11 on gift aid would apply?
	My second point concerns VAT on charities. I understand the difficulties, but I was saddened by the VAT provisions and wonder whether it would be possible to abolish them for charities where it could be proved that their programmes were based only in the UK and were oriented towards social, educational or welfare purposes. That would help many charities and would mean a saving of millions of pounds for them.
	As a previous director of a charity—I declare an interest, as someone who is still involved in charities—I fully understand the problems that charities face. Programmes such as distance learning projects, which link schools across the world, create a better understanding not only of religious but of other means of charitable provision, and they certainly benefit the schools involved. A finite amount of money is available from philanthropy and any movement to provide further help would be welcome. As I have already said, I am fully aware of the financial difficulties that might be caused by my suggestion.
	Until recently, I was a cabinet member for the community in the London borough of Redbridge, so I know that large sums of money are given to charities through the voluntary sector grants programme. The suggestion that I have made would mean that some of those grants would no longer be needed, so they could be given to other groups in the voluntary sector. That would provide a better use of the taxes raised both locally and nationally.
	As I said at the start, I am fully aware of the potential problems, but, like myself, the Economic Secretary has also been involved in charities for many years and understands what they have to grapple with when they face VAT costs. I would really like the matter to be looked into further, notwithstanding the difficulties.

Richard Spring: We have had an excellent debate and heard some very good speeches, and I particularly welcome the maiden speeches from both sides of the House. We started off with a speech from the hon. Member for Newcastle upon Tyne, North (Mr. Henderson), who referred to the taxation of pensions in clauses 7 to 10.
	We then heard from the hon. Member for Eastleigh (Chris Huhne), who brings considerable experience from his time as an MEP to this place, so we welcome his contributions. He spoke about growth rates in the EU, about the impact of house prices and house liabilities. He also referred—it is an important issue, if slightly outside the confines of the Bill—to self-invested personal pensions and the whole "home to let" relationship. It is a matter of controversy and will undoubtedly be debated in the public domain.
	I would argue, however, that it has become such an important issue because of the severe pressure on individuals to restore decent pensions for themselves. That has become a huge difficulty now in this country and I hope that the hon. Member for Eastleigh would concede that, if we go back eight years, the issue was not in the public domain or shared among the people of this country. Their anxieties were much less then, which says much about the collapse of savings, the attack by the current Chancellor on the pensions industry and, in a sense, the perfectly legitimate desire of people to put money into property in order to secure a decent income for their old age. The hon. Gentleman is absolutely right that we must look carefully into the problem in order to prevent any abuses, but we also need to understand how it has all happened—a development that none of us can welcome.
	The hon. Member for Newport, East (Jessica Morden)—unfortunately, she is no longer in her place—made her maiden speech and spoke warmly about Alan Howarth, the previous Member, who is now, I understand, in the House of Lords. Indeed, he is well known as a personable individual, well liked on both sides of the House. I understand that he is the second of her predecessors who has entered the other place. She spoke about the history of Newport, the Chartist movement and the importance of local industry, and she used the term "economic renaissance" to characterise the new businesses entering her constituency that have brought employment growth. In my view, the hon. Lady delivered a confident and well presented speech. When she enters the Chamber, I will have the opportunity of wishing her well in her parliamentary career. I am sure that she will make a valuable contribution to our debates.
	It is always a great pleasure to hear from my hon. Friend the Member for Grantham and Stamford (Mr. Davies)—an outstanding and original thinker, who always presents telling arguments. He spoke about the abstruse nature of the Red Book, which has developed over the last few years, and he is entirely right about that. It is increasingly difficult to get to the essentials of what the Red Book is about. He also talked about worrying aspects of economic policy and argued, as widely asserted by many independent commentators, that the Chancellor appears to be losing the control over public expenditure that he has spoken about so often.
	My hon. Friend is absolutely right to talk about the rising tax burden in this country—5 per cent. of GDP over the last five years, which is an enormous increase by any historic standards. The current budget deficit is now substantial and the Chancellor's capacity to miss the forecasts does not bode well for the future. My hon. Friend is also absolutely right to say that rules must be effective and he ably challenged the Chancellor's interpretation of the so-called golden rule.
	The hon. Member for North Ayrshire and Arran (Ms Clark) also made her maiden speech, in which she very passionately spoke of her constituency. She was extremely articulate and talked about Keir Hardie being part of the history of her constituency. I sometimes wonder what Keir Hardie would make of current Labour politicians, who seem to spend their summers not helping trade unionists and others, but staying in princely Italian palazzos. That is certainly a very long way from Keir Hardie.
	There seems to have been some genetic programming, which was apparent when the hon. Lady talked about her great-great grandfather being a pacifist and socialist. Once again, I wonder what her great-great grandfather would think of the current reign of the Prime Minister, soon coming to an end, in that context—[Interruption.] I see that the hon. Lady is now in her place, so I can tell her that I have been praising her for her confident and competent speech, including her comments about Keir Hardie and her great-great grandfather, which we all enjoyed hearing.
	The hon. Lady also spoke about our presidency of the G8, about world poverty and, indeed, about the importance of the UK taking a lead in that matter. That view is shared on both sides of the House. Now that she is here, I would like to applaud her further and wish her well in her time in the House. I know that she will make some excellent contributions to our debates.
	It is always a great parliamentary treat to hear from the hon. Member for North Antrim (Rev. Ian Paisley), who is a great parliamentary institution in himself. He talked about links to Scotland and about the need to strike a balance between desirable outcomes in the very complicated Bill before us. He said that he supported anti-avoidance measures, but also raised the valid point that he did not want to see any innocent person suffering by being brought into anti-avoidance measures because they were not properly defined. As a doughty defender of Northern Ireland, the hon. Gentleman went on to say that water and sewerage services there require urgent upgrading. That is long overdue, and I hope that the Government will say what progress is being made.
	The hon. Member for Bristol, East (Ms McCarthy) also made her maiden speech this afternoon. She spoke about her predecessor, Jean Corston, a valued Member of this House who concentrated on human rights and who was a distinguished chair of the parliamentary Labour party. The hon. Lady talked about some of the individuals who were part of her constituency's history. They included Ernie Bevin, who started his career there and who is universally acclaimed as an outstanding Foreign Secretary in his day. She also mentioned Tony Benn and Sir Stafford Cripps. The latter was known for his frugality, and I wonder what he would have made of the lifestyles enjoyed by some Members of the Government Front Bench today. That would be an interesting revelation. However, the hon. Lady will clearly be a passionate defender and promoter of the city of Bristol and its rich history. I certainly wish her well in her time in the House.
	It was a great pleasure to hear the maiden speech by my hon. Friend the Member for Braintree (Mr. Newmark). He refused to take no for an answer at the election before last, and came back to win his seat just over a month ago. That shows great strength of character, and his wealth of successful business experience will be greatly valued. It shone through very clearly in his speech this afternoon. He was rightly generous to his predecessor, Alan Hurst, and to my noble Friend Lord Newton, who will be remembered by many hon. Members with great affection as a dedicated Front Bencher, active both in the Cabinet and in the House. He really was greatly liked.
	My hon. Friend spoke of the beautiful corner of England that he represents and he set out some of its history. He also mentioned the Anglo-American link that he embodies. Many of the original settlers in what became the United States came from the area covered by his constituency and mine. Many great parliamentarians, such as Churchill and Macmillan, shared his link with America, so we have high hopes and expectations for my hon. Friend. He talked too about the centralisation of public services—and I agree with him about that—and about the attack on our rural support structures. I am his near neighbour in parliamentary constituency terms, and I completely understand what he meant. He mentioned as well the terrible impact on pensioners and people on fixed incomes of the swingeing increases in council tax that have been especially devastating in constituencies such as ours. Quite rightly, he talked about the need to constrain the power of Government so that we can retain our competitiveness. After a maiden speech of that quality, we can expect many more excellent contributions from my hon. Friend in the years to come.
	The hon. Member for Wirral, West (Stephen Hesford) made some rather uncharacteristically churlish comments about my hon. Friend's contribution. I think that the hon. Gentleman's opponent in the recent general election was Esther McVeigh, and his remarks call to mind a conversation between Winston Churchill and Nancy Astor—in this case, I think that the substance of that conversation applies in the reverse. The hon. Gentleman spoke about the Bill's complexity. He said that we would have to explore the anti-avoidance proposals in detail, and he was right to ask specifically about the amount of revenue that they would raise. I hope that the Financial Secretary will give the House some clarification when he winds up the debate.
	It is always a great pleasure to listen to my right hon. Friend the Member for Charnwood (Mr. Dorrell). He is a very experienced politician, having held many distinguished offices in a previous Cabinet, and he brings to the House an understanding forged in a successful business career. That combination is all too rare. My right hon. Friend said that all hon. Members support well thought out anti-avoidance measures, and that that was linked to the Revenue having more discretion. As a quid pro quo, however, he said that we needed to look carefully at getting the balance right in respect of pre-decision tax clearance. He is absolutely right: the Revenue authorities must be more available to help businesses deal with matters such as tax arbitrage rules, for example. In that way, greater clarity can be brought to the planning process. I hope that my right hon. Friend will continue to contribute to debates such as this.
	My hon. Friend the Member for Shipley (Philip Davies) recently became a father, and I congratulate him on that, although I am not sure exactly when that happened. He spoke of his constituents' common sense and described himself as a straight-talking Yorkshireman. He spoke affectionately of Sir Marcus Fox, another great parliamentary character, and also paid generous tribute to his predecessor, Christopher Leslie. He was a fine Minister and, like my hon. Friend, I hope that he finds his way back to the House of Commons—but, also like my hon. Friend, not as the MP for Shipley. My hon. Friend said that he wanted to remain on the Back Benches. We shall see about that. He spoke of his business experience at Asda and about working for his mother. However, despite his modesty, it is clear from his excellent speech that he may be tested in an entirely different direction.
	My hon. Friend the Member for Wellingborough (Mr. Bone) talked about how far he had travelled to reach the House of Commons. He described fighting Neil Kinnock in the Pudsey constituency, and spoke warmly about his predecessor, Paul Stinchcombe, who had sponsored Alexine's law. He spoke about his constituency and the problems encountered in his local hospital. He set out the pressures suffered by the road system in his area and he spoke about his constituents' fear of crime—a considerable problem all over the country.
	My hon. Friend also spoke about visiting Cranwell and about the importance of putting our country first. He was right to do so, as he was to talk about the danger of elites becoming disconnected from their electorates. The events of the past few days entirely vindicate that observation. He said that the European elite was obviously out of touch and that that was underlined by the results of the recent referendums in Europe. The House will be aware that the British Government have chickened out of holding a referendum in this country for fear of being given a lesson about elitism. However, I hope that a referendum will be held in this country one day. My hon. Friend displayed a true and good Tory instinct when he said that we must put our country first, and I applaud him for that.
	My hon. Friend the Member for Beverley and Holderness (Mr. Stuart), in another excellent maiden speech, talked about the problem of dignity and means-testing. I do not seek to make a party political point, but it is true that many people, especially the elderly, find the bureaucracy in the process of claiming their legitimate benefits very difficult. The huge growth of means-testing in our country has also played an adverse part in the decline of savings. My hon. Friend spoke about his predecessor, James Cran, who was a kind and funny person whom I knew well. He was very popular here. My hon. Friend also described the undoubted beauties of his constituency, including the famous Beverley minster, and how he hoped the Prime Minister would take up the invitation to visit. Well, my hon. Friend can try to invite the Prime Minister, but I expect that he has other geographic issues on his mind at present. My hon. Friend also mentioned the lifeboats and the Royal National Lifeboat Institution, a group of unsung heroes. He also talked about coastal erosion and the need to simplify the labyrinthine systems and overreaching bureaucracy that are part and parcel of our benefit system. I am truly delighted that he is now a parliamentary colleague and I know that he will make an excellent contribution to our debates.
	I was very pleased to hear the speech by my hon. Friend the Member for Surrey Heath (Michael Gove). For some time, he has surveyed the activities of this House as a journalist, casting an eagle eye on our debates and issues of policy. He did so with great perspicacity for many years. I am delighted that he is no longer an observer of our activities but part of them and I know that he will contribute richly to our proceedings. He talked about his constituency and the vibrant multinational companies located there, as well as the small companies. My hon. Friend talked movingly about his own family experience and the implications for it of a destructive bureaucracy. That has obviously provoked much thought on his part, and I entirely share his conclusions. He was very generous in talking of his predecessor, Nick Hawkins, whom he praised as a hard-working constituency MP with a sharp legal mind. My hon. Friend talked about the beauty and charms of his constituency and he also mentioned, with reference to Camberley, the importance of the military in our national life, a comment that will have struck a chord with many hon. Members. At a time when many of our national institutions are under something of a cloud our armed forces are probably held in greater esteem than any other institution, and they deserve our support. My hon. Friend also talked about the pressures of overbuilding in the constituency, of the terrible centralisation of decision making on such matters and the inability of local people to have any real influence on what happens in their environment in planning matters. He warned of arbitrariness and retrospective application in clause 39, and he was right to talk about the need for low taxes, a simplified taxation system, light and flexible regulation and for this nation to be outward looking. I am delighted that he is now a parliamentary colleague and I know that he will be a great contributor to our debates.
	The hon. Member for Richmond Park (Susan Kramer) warned of pension mis-selling and property linkage. The FSA is there to deal with that and I hope that the interests of investors will be protected with a lighter touch than has been the case. One has to ask why people are driven to such behaviour, and it is because of the decline in pensions as a factor in income, especially as people get older. It is to the eternal shame of this Government that what they inherited—probably the most generous, effective and well funded pension system anywhere in Europe—has come to the present state. The hon. Lady also talked about money for infrastructure projects and she made an interesting suggestion, although I am not sure that it is Liberal Democrat policy, that windfall taxes should be levied on gains arising from property that rises in value as a result of infrastructure projects. That will be an interesting subject for discussion as the Liberal Democrats sort out their tax policy.
	My hon. Friend the Member for Chipping Barnet (Mrs. Villiers) brings to the House her tremendous experience as a Member of the European Parliament. She was considered to be an outstanding MEP on Treasury-related matters. In the European Parliament she made a huge contribution and we got a flavour of her quality when she spoke today—she has already made her maiden speech. She talked about the European company statutes, clauses 51 to 65, to set up pan-European companies, and she warned that although that will be voluntary it will be very bureaucratic. As she said, after 30 years, most businesses favour national corporate registration as opposed to EU registration. She talked about the EU's encroachment on tax affairs, and she was absolutely right to talk about the role of the European Court of Justice in pushing forward tax harmonisation and to ask how its power could be curbed. She referred to the Marks and Spencer case, which will be an interesting one to follow.
	Clause 37 refers to schedule 6 and the implementation of international accounting standards and I am pleased that the Government listened and have already amended the original Finance Act 2005. My hon. Friend talked about the need for transatlantic standards in accounting practices, and in respect of clauses 16 to 23, on the taxation of investment funds, she referred, as have others, to her concerns about the delegation to secondary legislation and the importance of proper scrutiny of all the proposals. She rightly emphasised, as I have sought to do in the last few minutes, the crisis in savings and pensions, which is in part due to the scourge of bureaucratic means-testing that has been so counter-productive in that regard.
	It was excellent to hear from my hon. Friend the Member for Windsor (Adam Afriyie), who talked about the importance of examining the Bill's impact on businesses. He was right to say that our private sector is the engine of our economy; for charities, it is the golden goose and we should consider the weight of regulation. He referred to the charitable giving and gift aid provisions in clause 11 and their impact on the hospices in his constituency and, indeed, on Windsor castle. He wanted some clarification and we shall certainly be considering the implications of those proposals in Committee.
	My hon. Friend the Member for Wimbledon (Stephen Hammond) spoke about the complexity of the tax system. Of course, that is desirable for anti-avoidance but we must look carefully at the implications for international competitiveness. He talked about the small charities and museums in his constituency and raised an important point about what the definition of the viewing of artefacts is and whether that needs examination. Indeed, it does and we shall consider it in Committee.
	My hon. Friend the Member for Ilford, North (Mr. Scott) is an ex-director of a charity and he talked about old manuscripts and books. He asked whether clause 9 would apply and I hope that the Financial Secretary will refer to that when he winds up the debate.
	As we consider the British economy we can see that we have certainly come a long way from post-neoclassical endogenous growth theory. I looked up "endogenous" in the dictionary; it said "growing or originating from within". As we can see once again in the Finance Bill, what has certainly grown from within is the sheer, appalling complexity of our tax system—a culture in which announcements are made that leave everybody from ordinary citizens to business people in the dark, with professionals such as accountants and actuaries struggling to get to grips with what is happening. Whatever else the Chancellor's legacy may be, it will be the micro-management of the economy on a scale unprecedented in our history.
	In Committee, we shall of course want clarity about retrospective or retroactive proposals. Naturally, illegitimate tax avoidance is something that nobody could support but we shall want to examine the entrails carefully.
	In conclusion, of course anti-avoidance is at the heart of the Bill, but we shall want to examine it in detail in Committee and achieve a balance to ensure that anti-avoidance is clear and workable in practice. Undermining the attractions of the UK as a place to do business simply cannot be countenanced. We want to minimise arbitrary and unnecessary intrusiveness and to maximise the availability of pre-clearance to the taxpayer. We want to consider enhanced powers and the discretion of the Revenue, as in clauses 24 and 26 on tax arbitrage. We want a fair quid pro quo for the investor and for the business community.
	Deregulation has been alluded to; for example, e-conveyancing, which is covered in the Bill, was mentioned. However, I say to the Paymaster General: there is no point in the Chancellor announcing, as he has done, that he is reducing the number of quangos and civil servants. There can never simply be effective deregulation without changing the very remit of the regulatory authorities, such as the Financial Services Authority, separating them more from Treasury influence and enforcing the principle rather than detailed prescription.
	To talk the talk of deregulation, pile on yet more and more red tape and not change the underlying remit of the statutory authorities that are involved in regulation is, of course, to mislead the public about the true intentions of this control-freak Government on so many levels. The sheer cost of dealing with our rules and regulations and our tax system is now a huge burden on our businesses, our national life and our public services. We cannot deal with all that in the Bill—it is narrowly based—but we accept it in principle and will not seek to divide the House tonight.

John Healey: In recent years this country has done extremely well at attracting direct foreign investment, and we still do. We lead many other European countries on foreign direct investment into the European Community. Business investment has also been rising recently.
	I look forward to the detailed debates on the Bill's specific provisions that I will no doubt have with the hon. Member for Runnymede and Weybridge, but in keeping with this Second Reading debate, I propose to respond to two of his principal questions now. He raised a concern connected with insurance companies about business transfers and apportionment under clause 42. He said that fundamental changes would be made through secondary rather than primary legislation, and that point was also made by the hon. Members for Chipping Barnet (Mrs. Villiers) and for Wimbledon (Stephen Hammond). The regulation-making power about which the hon. Member for Runnymede and Weybridge is worried will allow continuing consultation on the detail of the new rules with the insurance industry. The industry is actively involved in the process. It wanted more time for consultation and accepted that the way to achieve that would be to implement the provisions in secondary rather than in primary legislation. I think that it also accepts that that is a sensible way of ensuring that we can change provisions of tax legislation if the Financial Services Authority changes the regulatory regime.
	The second principal point of concern that the hon. Member for Runnymede and Weybridge raised was what he described as retrospection. The Bill contains several provisions that were pre-announced in either the pre-Budget report 2004 or the Budget 2005. It is standard practice to make anti-avoidance provisions effective from the date of their announcement to prevent individuals and companies from taking advantage of the gap between the dates of their announcement and implementation in legislation. The hon. Gentleman and his colleagues will recognise that that is standard practice because it was done by the previous Government and has continued to be done by this Government.
	The hon. Member for Eastleigh (Chris Huhne) acknowledged that macro-economic policy is a sound backdrop to the Bill. I welcome the fact that he brings a strong European perspective to our debates, as does the hon. Member for Chipping Barnet. He and the hon. Member for Richmond Park (Susan Kramer) made serious points about self-invested personal pensions and the scope to put property into pension funds. They both promised to give those provisions close scrutiny during the passage of the Bill, and I look forward to that because those measures are not in the Bill—they were legislated for in last year's Finance Bill.
	The hon. Member for Richmond Park also raised alternative funding mechanisms, which are well beyond the scope of the Bill. She may know that the Government are considering as part of the package of proposals put forward by the Barker review the possibility of a planning-gain supplement, which might address her point.
	I turn to the admirable and entertaining maiden speeches to which the House has been treated. My hon. Friend the Member for Newport, East (Jessica Morden) gave us the model of a maiden speech. She, like her predecessor, will clearly be a committed and diligent MP. She set out the challenges that she wants to tackle as a Member of the House and made it clear how much progress her constituency has made under a Labour Government. I am pleased to say, however, that she will not be making a submission to the boundary commission to propose renaming her constituency "New Newport, East", despite the fact that she has given good service to new Labour in several roles, most recently as a regional director in Wales.
	My hon. Friend the Member for North Ayrshire and Arran (Ms Clark) made an impressive maiden speech with no speech notes, but lots of passion. She clearly brings a strong political family history and pedigree to the House and I look forward to the strong contribution that she will make to our debates in the future.
	My hon. Friend the Member for Bristol, East (Ms McCarthy) treated us to one of a number of humorous maiden speeches made today. As she said, she follows several distinguished predecessors who have represented her constituency, but she brings significant experience of economic and financial matters to the House and, hopefully, to our debates on economic matters, too.
	I was pleased to be present when the hon. Member for Braintree (Mr. Newmark) delivered a courteous and kind tribute to his predecessors, including Alan Hurst. The hon. Gentleman treated us to a very interesting and entertaining maiden speech and talked about the history of his constituency and in particular the history of a local market, which dates back to the early 1200s under King John. That reminded me that King John introduced the first national customs service, although I do not know whether he did so with some of the hon. Gentleman's local markets in mind at the time.
	The hon. Gentleman made a couple of rather strident political points, as did the hon. Member for Beverley and Holderness (Mr. Stuart). Both tried to take the Government to task over our approach to support for pensioners. May I just say that means-testing is necessary for means targeting, and targeting resources on our poorest pensioners through pension credit means that the poorest third of pensioners now receive £32 a week more than they would have done had we simply raised the basic state pension in line with earnings since 1997. The pension credit now pays more than £6 billion a year to our poorest pensioners, guaranteeing them now a minimum income of £109 for a single pensioner and £167 for a pensioner couple.

Ben Chapman: I should like to begin by welcoming the Minister of State, Department for Transport, my hon. Friend the Member for South Thanet (Dr. Ladyman) to his new position, by congratulating him on his promotion and by welcoming him to his first Adjournment debate in his new capacity. I am delighted to have secured this debate on road traffic accidents and tiredness. I intend to cover three points on signage and its ability to prevent, lessen or cause accidents.
	Anyone who has driven on a motorway in recent years will be aware of the presence of the blue signs that warn that "Tiredness Kills". The location of those and their potential effectiveness in enhancing road safety is the first of the issues that I want to raise. The signs seek to tackle the issue of falling asleep at the wheel. Research carried out by Loughborough university has found that 17 per cent. of road crashes that involve road death or injury were sleep-related. That was, in the researchers' opinion, a conservative estimate. That compares with a figure for alcohol-related crashes, for example, of just 3 per cent. The disparity is startling. It might be a measure of the extent of public awareness about drink driving that, thankfully, now exists.
	On the issue of tiredness and driving at the wheel, the Department for Transport has not been idle. According to its website, roughly £1 million a year is spent on publicity warning the public of the dangers of falling asleep at the wheel. There have been press advertisements, one of which I have brought with me. It carries the message:
	"You drive for a living but you'd kill for some sleep".
	I welcome that stark and effective message, but I have not come across those advertisements nearly as often as I would have liked to have done. There is also a dedicated road safety website, among whose pages a substantial section is devoted to "Tiredness Kills", but much more is necessary.
	Driving while under the influence is in 2005 considered by the vast majority of people to be socially unacceptable, but it has taken many years of public information campaigns from the 1960s to the present day to achieve that. Just this week a new campaign is to be launched that will target the summer months. The budget for it is around £2 million a year. Just half of that sum is to be spent on publicity warning the public of the dangers of driving while tired, although doing so causes many more accidents.
	In some ways, of course, one cannot compare the two causes; it is by no means an exact science. One needs to look at the matter carefully to work out the real causes. There is evidence, for example, that undiagnosed medical conditions have their part to play, as do prescription drugs. We cannot suggest that in all cases a driver acted grossly irresponsibly in causing an accident through tiredness as we can for those driving under the influence, but we can credibly claim that there are many cases in which precisely the same culpability is attached. The level of public awareness has not yet caught up with the reality of the situation, and I press the Minister to commit more resources to a campaign in that regard.
	The quibble that I have with the "Tiredness Kills" signs lies with their siting and not their funding. According to the Minister's predecessor, there are 57 signs on motorways in England. To the best of my knowledge they are without exception sited immediately prior to the entry slip road of motorway service areas. That is good, but of course highly convenient for the commercial operators who maintain and benefit from them. I am not sure that the signs fully optimise their remit. Indeed, as I learned from a written answer, they are sometimes erected purely at the request of operators of the service areas.
	However, there are large stretches of motorway throughout the UK that are devoid of places of rest and consequently of signs reminding drivers to take a break. The Loughborough university research found that sleep-related crashes occur least on Fridays and most on Mondays. It should not be beyond the wit of man to assess the location of sleep blackspots and to site warning signs accordingly, using methodology similar to that relating to speed camera locations. In fact, the Loughborough research did precisely that—identifying classes of crashes related to driver tiredness on the A1 in Lincolnshire and elsewhere.
	What is surely needed is such a study conducted nationwide. We should not be in the business merely of reacting to the data as it is collated. Such an exercise would of necessity be lengthy, and I would argue that blackspots can be reasonably accurately predicted according to, for example, the type of driver who frequently uses a particular section of road and at what point in the majority of journeys one enters identified periods of increased vulnerability to sleep. There are surely many different criteria by which one might seek to predict the most suitable location for "Tiredness Kills" signs and which would result in their more effective siting than the current approach. Another way of tackling the issue of tiredness is to use the variable message signs that can be programmed to give notice of congestion and so forth more intelligently and extensively to alert drivers to the dangers of tiredness.
	The measures contained in the Road Safety Bill recently introduced in another place may include proposals to pilot French-style picnic and rest areas. I welcome that; indeed, I urge the Minister to ensure that the programme is rolled out as quickly as is practicable and to reject the representations of service area operators lobbying against it, albeit for sound business reasons. Such areas are a welcome alternative to the catch-all services areas that currently predominate. In present circumstances, I fear that most drivers will stop only if they have cause to do so for reasons of thirst, hunger or, as it were, the call of nature. An alternative without the shops, restaurants and so forth would encourage a cultural shift in the manner in which long journeys are embarked upon.
	I turn to roadside advertising, which is, in many forms, a hazard. Anyone who has recently travelled to or from the north of England using the M6 will not have failed to notice a plethora of advertisements in fields adjoining the carriageway. Some offer used cars for sale, while others might offer to help solve debt problems or to provide fitted kitchens. Some sites are used by well-established multinational corporations and others by what appear to be one-man or one-woman bands. I saw one of particular note between junctions 18 and 19 of the north-bound M6 which advertised escort services, although on closer examination it may have related to ancient Ford vehicles.
	However, whatever the repute of the advertisements, the raison d'être of these signs is to draw attention to themselves and to the messages and details that they contain. Some are more effective than others at doing this, but the point is that if they do not distract, they do not work. If using a mobile phone while driving is now illegal, albeit much ignored, trying to get people to take down a telephone or website address by whatever means while driving at speed is no less questionable. I am not suggesting that a competent driver is unable to deal with a myriad of potential distractions and complex driving situations, but what concerns me, as well as several of my constituents and, I imagine, colleagues in the House and road users up and down the country is the sheer scale and apparently intractable nature of the problem. Companies have been set up specifically to cater for and nurture the demand for such advertisements, one of which boasts on its website:
	"Advertising on motorways is one of the most effective ways to send your message to hundreds of thousands of potential customers . . . it grasps the attention of the bored motorway user; as a consumer he/she fully absorbs and thinks about the message your advert has just delivered."
	Frankly, they ought to be thinking about something else—the safety of themselves and other road users.
	It seems, although it is not the case, that this is an area that is free of regulation. The fact that that impression is given, however, is enough to suggest that the measures that are in place are not being used as effectively as they might be. Signs of this nature are covered by the Town and Country Planning (Control of Advertisements) Regulations 1992. It would not be helpful or interesting for me to go on an excursion into the minutiae of planning regulations, but it is worth mentioning that two tests are specified by the regulations—public immunity and safety. I would contend that the vast majority of advertisements placed in fields adjoining motorways would fail both of them. Certainly, when due process has been followed by prospective advertisers it seems that there are very few occasions when planning permission has been granted, and even when it has, it is by no means clear that it should have been. A circular from the then Department of the Environment, Transport and the Regions gives the following guidance:
	"Land alongside motorways is landscaped for reasons of safety and appearance . . . It is hoped that local planning authorities will take steps to ensure that on land alongside motorways but not required for them, no advertisements that could adversely affect amenity or constitute a danger to traffic are allowed."
	That, you might think, Mr. Deputy Speaker, is clear enough, but an apparent loophole exists in the regulations through an exclusion applied to vehicles. Most of the offending advertisements consist of an articulated lorry trailer painted or draped with an advertisement. Those involved might be under the impression that because vehicles are exempt from the regulations they do not apply to them. If there is such an impression, however, it is mistaken, as it cannot be claimed reasonably that such trailers are, in the words of the conditions,
	"normally employed as a moving vehicle"
	or that they are
	"not used principally for the display of advertisements."
	While the middlemen who act as go-betweens for the farmer and advertiser are nothing if not entrepreneurial, the practice has not altogether enjoyed the status of legitimacy. I am pleased, for example, that the Outdoor Advertising Association is at pains to condemn this, and that it is not something with which its members would associate themselves.
	It is clear that existing regulations, while they might be technically sufficient to cover the problem, are simply not working effectively. That is the evidence from just a single drive up the M6, for example. Some local authorities are better at tackling the issue than others—Chester city council, for example, has directed resources at and managed to get to grips with the problem. In another case, police motorway patrols have kept a record of the offending advertisements. The intention is for that record to be passed to planning officers. That serves only to underscore the ineffectiveness of the current regime. The issue might concern planners, but surely only on technical grounds. As we have seen, virtually all cases that are heard by local planning committees are turned down on grounds of road safety. The signs are there only by virtue of being next to a trunk road—local authorities will always struggle to police a strip of land that happens to pass through an area under its jurisdiction but is no more integral to the patch than that. I am aware that the Office of the Deputy Prime Minister intends to remind local authorities of their duties in this regard later in the year, but that seems to me to be a case of flogging the wrong horse, and possibly of doing so too late.
	Furthermore, the problem applies at a more localised level. Some local authorities, including mine in Wirral, have also taken to erecting potentially distracting—in my view—small-scale advertisements with a council header on roundabouts, verges and the like as an extra source of revenue. Anything that saves my council tax I welcome, but I wonder about this. The signs are treated as de minimis, and as individual signs, so they are. Taken together, however, they are a major change to the landscape, and I doubt whether they should be regarded as de minimis. In my view, they do not have a beneficial place in the landscape. I am afraid that, sometimes, they clutter the environment, and after a certain period, they look slightly tatty. As with motorway signs, if they did not distract, advertisers would not use them—they are hard-bitten business people, and they want the bang for their buck.
	As an aside, I cannot see that any council would want to take advantage of a scheme, albeit one bringing in revenue, in which the gains did not outweigh the disadvantages. In addition, the appearance of such an advertisement in a frame carrying a council logo might give a spurious impression of council endorsement.
	Given that we are dealing primarily with road safety, should not roadside signs be a responsibility of the Highways Agency? Currently, it looks after and has powers to intervene in all such matters, as needed, on all land that constitutes the highway, but is powerless to act on land outside it. The point at which control of the planning process transfers from one local authority to another is purely arbitrary, and advertisers are attracted to motorways as a location precisely because of their arterial nature. In conjunction with the police, the Highways Agency regularly patrols sections of road as part of its everyday duties—in contrast to local authorities, which would have to make special trips, often well away from their headquarters. A good start would be to hold advertisers responsible rather than landowners, the tracing of whom is often vastly time-consuming. While I understand that that is already possible, because this is seen as entirely a planning issue it rarely happens. What is clear is that a change is needed, both in the extent to which regulations are enforced and in the source from which they emanate.
	I ask my hon. Friend the Minister to look at the issue again, and perhaps to consider amendments to the Road Safety Bill relating to awareness of the dangers of falling asleep and the way in which campaigns are conducted.

Stephen Ladyman: I thank my hon. Friend the Member for Wirral, South (Ben Chapman) for welcoming my new portfolio; I look forward to it greatly. He will have seen in the weekend newspapers a prediction of one of the more exciting debates in which we will be involved over the next year or so, to which I also look forward. As my hon. Friend the Member for Stroud (Mr. Drew) pointed out, the Road Safety Bill will be before us in the not-too-distant future, and we shall be able to debate in detail many of the issues that we have discussed this evening.
	I congratulate my hon. Friend on securing the debate. I know that he has been interested in this subject for a long time, and I expect to debate it with him on numerous future occasions. We have a good road safety record in this country. In fact, it is among the best in the world. The number of deaths and serious injuries continues to fall, but every road death is one too many, so the Government have set a tough target to drive it down further. We have committed ourselves to reducing the number of casualties by 40 per cent. by 2010.
	As my hon. Friend said, road traffic accidents caused by drivers falling asleep at the wheel are a serious problem. Our research suggests that as many as 10 per cent. of accidents on our road network are sleep related in one way or another, and as many as 20 per cent. of accidents on motorways and similar roads occur as a result of driver sleepiness. Many are single-vehicle accidents, but they can have particularly tragic consequences. We have estimated that more than 300 fatalities a year occur because drivers have fallen asleep at the wheel.
	Being new to this portfolio, I, like any new Minister, began with many intensive briefings, and I was staggered to discover how high our estimate is of the number of fatalities resulting from sleepiness. It is difficult to tell, however, whether the number of accidents resulting from driver sleepiness is rising. However, as we increasingly become a 24/7 society, more people are driving at night, when the risks are higher.
	In recent years, we have acquired considerable knowledge on the subject of driver sleepiness through our road safety research programme. This has established that sleep-related crashes typically involve vehicles running off the road or into the back of another vehicle, and are worsened by the high speed of impact because the sleeping driver takes no avoiding action. Sleep-related crashes are therefore more likely to result in serious injury than the average road accident. Many of the accidents are also work related, in so far as they involve trucks, goods vehicles and company car drivers. That is one reason why the advertising campaign and poster referred to by my hon. Friend the Member for Wirral, South is targeted at people who drive for a living.
	The body's natural biological clock has a major influence on sleepiness. Such accidents peak in the early hours of the morning—between 2 am and 6 am—and again between 2 o'clock and 4 o'clock in the afternoon. These are times when we are naturally sleepier, due to our circadian rhythms. Sleep-related crashes are more evident among young male drivers in the early morning and among older male drivers during the mid-afternoon, as the post-lunch "dip" tends to become more apparent as we get older. Young men are, of course, more likely to be on the road during the small hours, but the effects of sleep loss and sleepiness are more profound in younger, rather than older, people. Young men are also more likely to ignore the signs of sleepiness, so they are at much greater risk of being involved in a sleep-related crash.
	Our research has also looked at how drivers fall asleep at the wheel. We know that sleep does not usually occur suddenly and without warning. Signs of sleepiness such as yawning are the first indication, and drivers will reach the stage of consciously trying to stay awake by taking action such as opening the window or turning up the radio before they start to close their eyes for prolonged periods. Drivers should be aware of these signs, but many fail to appreciate that their driving is impaired and just how quickly they can fall asleep.
	Unfortunately, sleepiness can also cause mild euphoria and increased confidence in one's driving ability. However, continuing to drive while sleepy and relying or cold air or noise to stay awake has been shown to have limited benefits—sufficient only to enable a driver to find somewhere safe to stop and take a break. Taking a short walk has also been found to have little benefit. Nor do we recommend using sleep detection devices, as drivers may be encouraged to rely on them in order to stop falling asleep, when in fact they should not be driving because they are tired. A driver should stop well before such a device is activated.
	As soon as drivers start to feel sleepy, they should stop somewhere safe—not on the hard shoulder of a motorway—and have a couple of cups of coffee or other caffeinated drink. As the caffeine takes about 20 minutes to be absorbed, drivers should take this time to have a short rest. A nap of about 15 minutes, or even just relaxing and closing one's eyes while the caffeine kicks in, is effective in combating sleepiness. Across the motorway network, service areas should be available every 30 miles or so, giving drivers a chance to stop regularly. Most other roads offer a variety of opportunities for drivers to take a break.
	My hon. Friend the Member for Wirral, South referred to the "Tiredness kills: take a break" signs. They are currently sited on the approaches to some motorway service areas, particularly in places where there are few other opportunities to stop. As he said, they are generally located in advance of the signs for the service areas, where drivers can stop in a secure place. As he also said, there are currently 57 such signs on motorways in England. Decisions about the provision of such signs on trunk roads and the motorway network are a matter for the Highways Agency. I will consider my hon. Friend's suggestion that there should be more of them and that they should be located differently. As I said, I am new to the portfolio and I am still learning what might and might not be effective. I am prepared to look at sensible suggestions such as the one that he has made. I certainly undertake to consider with the Highways Agency whether we should have more of those signs and where they should be located.
	As my hon. Friend the Member for Stroud mentioned in an intervention, the Road Safety Bill is about to be considered by the House again. It was introduced in the House of Lords on 24 May, and it will allow the Secretary of State to establish motorway rest areas to help to combat fatigue. Those rest areas will be similar in style to French "aires" and will provide an alternative to traditional motorway service areas. The plan is for an initial trial to evaluate the potential to encourage drivers on long journeys to stop to take a break, rather than to press on to their destination.
	We have to ask how we can change driver behaviour. For a number of years, the Department—my hon. Friend the Member for Wirral, South referred to this—has run publicity campaigns to highlight the dangers of falling asleep at the wheel. However, to ensure that we had a good understanding of how the driver tiredness messages should be developed, towards the end of last year the Department commissioned some qualitative research and found that drivers believed a good journey was one that could be made without stopping.
	For many, the solution when starting to feel sleepy was to wind down the window and turn up the radio. Refuelling the car or stopping to buy food or to go to the toilet was seen as taking a break. Some male drivers felt that the advice to take a nap was unrealistic. We therefore decided to develop new messages as part of an integrated campaign that featured new radio advertisements, new publicity materials such as posters and leaflets, and partnership advertising. The new campaign was launched this Easter. It targeted young male drivers, who are more likely to fall asleep at the wheel; leisure drivers, who may drive further distances at holiday times than they are used to; and those driving for work, in view of the high number of fatigue-related crashes involving someone who was at work at the time.
	For the male 18 to 30 age group, the radio advertisement sets out the reality of a crash when a sleeping driver has failed to brake. It was run between midnight and 6 am as that is the high-risk period. The fact that my hon. Friend has not heard the advert too frequently probably indicates that, usually, he is not driving between midnight and 6 am and that he is not listening to the same radio stations as 18 to 30-year-olds. The advertisement aimed at leisure drivers highlights how the monotony of motorway driving can send them to sleep and reminds them to take a break. We are also continuing to run the micro-sleep meeting advert targeting at-work drivers during the afternoon, when the body clock is in a natural trough.
	We spent more than £350,000 on the Easter campaign and I am pleased to report that we found that 51 per cent. of all drivers understood the main message to take a break while driving. That is up from the Easter campaign two years ago, when 19 per cent. of drivers recognised the message. We have earmarked some £600,000 for the driver tiredness campaign during 2005–06.
	My hon. Friend agreed that we had dedicated resources to that message. He asked us to look at dedicating more resources to see how effective it was. I assure him that we will look to see how effective the campaign is. If necessary, we will look again at how resources are targeted.

Stephen Ladyman: I agree with my hon. Friend that if an older driver has developed a condition that makes him or her prone to fall asleep and become dangerous at the wheel, it should be a matter of careful consideration as to whether they should continue to be allowed to hold a licence. I shall look further into our arrangements for checking up on that matter and ensure that people's medical conditions are properly assessed and reported to the Driver and Vehicle Licensing Agency. I am happy to give my hon. Friend the assurance that we will look further into the problem that he identifies. As I have said, if sensible amendments could be suggested to the Road Safety Bill that would be practical in effect, I would be happy to examine them.
	To conclude my remarks about the campaign that we launched, it was also promoted by partnership marketing activity where interested parties reinforced the driver tiredness messages. For example, Multimap encoded the "Take a break" message into their route planner, so drivers were reminded that after two hours of driving it was time to take a break. Road Chef and Little Chef offered coffee promotions. The Royal Automobile Club, What Car? magazine and the M6 toll road all distributed publicity materials for us and free truck-back advertising has also been negotiated with Wincanton to include driver tiredness messages.
	Although we rely on educating drivers about the dangers of sleepiness, it is important to remember that the police can take action and prosecute irresponsible drivers who fail to take action when they start to feel sleepy. The courts also take the issue seriously, as falling asleep at the wheel is treated as an aggravating rather than a mitigating factor when considering sentencing.
	Our publicity messages are, of course, aimed at all drivers, but it is important not to overlook those who are driving for work. We estimate that about 40 per cent. of sleep-related crashes are probably work related, as they involve commercial vehicles such as large goods vehicles and vans. Employers should also ensure that employees who have to drive as part of their job have the opportunity to take breaks and know that they can stop if they start to feel sleepy.
	Professional drivers are governed by additional rules. European regulations require the use of tachographs and set maximum limits on driving time and minimum requirements for breaks and rest periods for most HGV drivers and about half the bus and coach drivers in the UK. Separate UK domestic rules govern those operations that are exempt from the EU drivers' hours rules.
	There is also separate legislation on working time. Generally speaking, the Road Transport (Working Time) Regulations 2005 apply to drivers and crew participating in road transport activities that fall within the scope of European drivers' hours rules, whereas the main Working Time Regulations 1998, as amended, apply to those drivers operating under domestic rules.
	A further measure in the Road Safety Bill should help enforcement of the rules. New powers are being sought to enable both the police and the Vehicle and Operator Services Agency examiners to issue fixed penalty notices for drivers' hours offences. The penalties will be graduated according to the severity of the offence.
	My hon. Friend the Member for Wirral, South also expressed concern about the potential distraction caused by advertisements next to motorways. Although there is much anecdotal evidence to suggest that advertising alongside motorways can have a detrimental effect on road safety, the results of studies carried out to date have been inconclusive.The Highways Agency is concerned that, as unauthorised signs proliferate, there may be an increased impact on road safety, as well as obvious detriment to the environment alongside the road. However, it has no general powers to remove advertisements on private land.
	Advertisements displayed in fields next to motorways should have the approval of the relevant local planning authority, but many are erected without the appropriate consent. Local planning authorities have powers under the Town and Country Planning Act 1990 to require any unlawfully displayed advertisements to be removed. The Highways Agency will write to the relevant local planning authority to bring the presence of the advertisements to the planning authorities' attention. I will undertake to discuss this matter again with the Highways Agency, and make sure that its officials are diligent in bringing advertisements to the attention of local planning authorities. If it appears that that is ineffective, I shall discuss the matter with ministerial colleagues to see whether other powers can be deployed or whether future legislation should be modified to include provisions to deal with this problem.
	As my hon. Friend the Member for Wirral, South may be aware, although the display of advertisements is not normally permitted within the highway boundary, operators of motorway service areas are allowed to display their company name on a header board fixed to service area advance warning signs. Only the name of the operator may appear, rather than merely the name of a company trading at the service area.
	My hon. Friend has raised some important issues in this debate. I repeat that, as I am new to my portfolio, I do not claim to have all the answers yet. He has offered some sensible ideas and made constructive suggestions for how we should proceed, and I shall make sure that my officials study them with care. We will adopt those proposals that the evidence shows will lead to an improvement in the road safety statistics.
	I emphasise, however, that in the end it is the responsibility of drivers to ensure that they do not ignore the signs of sleepiness. I shall take the opportunity provided by this debate to put on the record my plea that drivers make an effort to plan journeys so that they can stop every two hours. They should not ignore the signs of sleepiness—their lives depend on it.
	Question put and agreed to.
	Adjourned accordingly at twelve minutes to Ten o'clock.